Cable continued to take its lead from the.....>

CABLE: Cable continued to take its lead from the performance of US equities, via

risk outlook, breaking above recent highs in the $1.2730/31 area during the NY

afternoon Monday before momentum faltered at $1.2736 ahead of the close. Early

Asia lifted rate on to an extended high of $1.2755 before general risk outlook

was dented by news that N.Korea was cutting communication lines to S.Korea

prompting concerns about increased tensions. A general strengthening in JPY,

continuing a move seen through Monday's NY session, acted to take cable down to

$1.2698 on the back of GBP/JPY sales into Europe but dip quickly attracted fresh

demand into the new session. Cable has edged back to $1.2720. Expect resistance

between $1.2731/36 ahead of $1.2755, a move above here to expose $1.2778(76.4%

$1.3200-1.1.1412) and $1.2795(1.618% swing target of $1.2731-1.2628). Support

remains around $1.2700, with the 50% retracement of the recovery from $1.2628 to

$1.2755 coming in at $1.2692. Below here to expose $1.2677 and

$1.2658(61.8%/76.4%). Risk remains the driver in sterling, with the pound seen

in a corrective phase, technical traders seeing potential to $1.32-1.33 ($1.3244

61.8% $1.4377-1.1412), but watching equity market performance for clues.