Cable reversed of an early Europe high of.....>

CABLE: Cable reversed of an early Europe high of $1.2628, breaking through

Thursday's (May30) low of $1.2581 before posting the lowest point since January

(Jan3 $1.2441) at $1.2559. Move was seen driven by EUR/GBP's break of tech

resistance at Gbp0.8850(recent reports noted decent demand into E1.1300/GBP)

with follow through taking this rate on to Gbp0.8875. Suggestions on month-end

sovereign demand did the rounds for the pressure on sterling. No confirmation

for this was found but did seem likely. As the cross demand faded so rate eased

back below Gbp0.8850, allowed cable to rally back ahead of the 1600BST fix to a

fresh intraday high of $1.2638. Bank models suggested USD demand was to be seen

at this fix and rate dipped to $1.2592 before it recovered back toward the high

in post Europe trade. Expect resistance at $1.2638 ahead of $1.2650 and

$1.2670/80. Support suggested back at $1.2600 ahead of $1.2580 and $1.2560/50.