Break of $1.2220 in Asia has allowed cable....>

CABLE: Break of $1.2220 in Asia has allowed cable to extend its corrective

pullback from late Tuesday highs of $1.2296, the souring of recent positive risk

tones (US-China tensions coming to the surface again) and Brexit negotiations

has acted to weigh back on the pound. This weakness also reflected in EUR/GBP as

the cross holds outside the topside of its 1.0% 10-dma which keeps the bearish

pressure on. Cable dropped to an initial low of $1.2193, extending the move to

$1.2186(50% $1.2076-1.2296) in opening European trade. Attention this morning

will be on the release of UK flash PMI's at 0930BST (market medians Mfg 37.2 vs

32.6 last; Svcs 24.0 vs 13.4 last). Market expecting a bounce in May, due to the

easing in lock-down, the pound to take direction on how strong these

improvements are. CBI Trends released at 1100BST. US Initial Jobless Claims into

the afternoon to draw interest.

- Support $1.2186/84(50% 1.2076-1.2296/May19 low), $1.2160(61.8%) ahead of

$1.2128(76.4%). Resistance $1.2220, $1.2250.