ECB signal to ease at its next Sep....>

EURO-STERLING: ECB signal to ease at its next Sep meeting prompted an initial

EUR sell react which dropped EUR/GBP to an extended low of Gbp0.8890 Thursday,

just shy of its 1.0% 10-dma envelope base which yesterday came in at Gbp0.8888.

Sharp bounce back, led by EUR/USD's bounce away from the $1.1100 area, took the

cross back up to Gbp0.8959 before it settled around Gbp0.8950 into the close.

Early Asia continued the consolidation around Gbp0.8950 before it nudged up to

Gbp0.8958 ahead of the European open. Stronger sterling sales emerged in Europe

which pushed the rate up to Gbp0.8968, holding just shy of its July falling

resistance, off Jul17 high of Gbp0.9051 (as cable found support at its Jul

rising support at $1.2426). Recovery also holds below its 10-dma, which

currently comes through at Gbp0.8981, which if continues will keep the bearish

tone in place. A break will turn attention back toward Gbp0.9000/10 ahead of

Gbp0.9051. Base of the 1.0% 10-dma envelope today has moved up to Gbp0.8891.