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Extends Pullback Into Europe, EUR/GBP Demand Leads

CABLE
MNI (London)

Wednesday's corrective pullback, from highs of $1.3267, extended to $1.3094 into the NY close, with the FOMC Minutes prompting USD demand across the board. Cable edged to $1.3119 in early Asia before it was pressed down to $1.3088 on early Tokyo USD/JPY demand. However, USD/JPY sales into the Tokyo fix reversed tack which allowed cable to edge back to $1.3109. Asian traders noted decent demand for EUR/GBP emerge and linked it to another round of downside pressure on cable, taking the rate to an extended low of $1.3075 into Europe. However, despite the move lower it hasn't so far triggered any stronger downside momentum, traders continue to see further pressure on the USD and prefer to buy cable dips. Support now seen at $1.3075/67(intraday low/ 76.4% $1.3005-1.3267) a break here to open a deeper move toward $1.3050. Resistance $1.3119, $1.3150, $1.3186. EUR/GBP is back above its key technical 10-dma (current Gbp0.9030) which puts a bullish tone back in place. Resistance noted above Gbp0.9050, stronger into Gbp0.9070. Some weak suggestion that Friday's Gbp0.9050 option expiry for E722mln providing some influence

MNI London Bureau | +44 203-586-2231 | john.webb@marketnews.com
MNI London Bureau | +44 203-586-2231 | john.webb@marketnews.com

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