As is often noted, EUR/GBP doesn't....>

EURO-STERLING: As is often noted, EUR/GBP doesn't like to make an appearance

outside of its 1.0% 10-dma envelope. Friday saw rate move outside, traded down

to Gbp0.8388 (envelope base Jan24 Gbp0.8420) in reaction to the release of

strong flash UK PMI data, but quickly bounced back on a mix of profit take

sterling sales as well as market taking the view that data might not be strong

enough to divert a possible rate cut at this week's BOE MPC rate

announcement(Jan30). Rate traded back to Gbp0.8444 before closing around

Gbp0.8432. Rate touched an early low of Gbp0.8421 in a holiday thinned Asian

session before it edged its way to an extended recovery high of Gbp0.8449. Early

Europe has shown some appetite for sterling which allowed cross to ease to

Gbp0.8432, currently trades around Gbp0.8440. While rate holds away from its

envelope base(by time currently at Gbp0.8407) it opens a move back toward its

10-dma Gbp0.8491. Interim resistance noted into Gbp0.8450 ahead of

Gbp0.8467(38.2% 0.8596-0.8388).