Found support Tuesday at $1.2971, the level...>

CABLE: Found support Tuesday at $1.2971, the level corresponding to the 50%

retracement of the last recovery from $1.2872 to $1.3070, before recovering, the

correction generated as EUR/GBP reacted to the release of disappointing Germany

ZEW data, the cross easing from Gbp0.8348 to a fresh YTD low of Gbp0.8282. Cable

rallied to $1.3049 ahead of NY but struggled to hold gains, the break below

$1.0800 in EUR/USD influencing cable lower, settling around $1.3000 into the

close. Consolidation through Asia saw rate held within $1.2995-1.3005. Opening

Europe pressed rate down to $1.2988, then settled back around $1.3000.

- UK Inflation data released at 0930GMT, CPI market median 1.6%yy vs previous

1.3%; core 1.5%yy vs 1.4% last. Market anticipating a pick-up in inflation, a

miss to weigh back on UK rate outlook which in turn will weigh on sterling.

- Cable support $1.2971, $1.2948(61.8% $1.2872-1.3070). Resistance $1.3040/50.