Position adjustments ahead of Wednesday's.....>

CABLE: Position adjustments ahead of Wednesday's FOMC monetary policy

announcement cited for the European morning's corrective pullback. Cable, which

had seen an extended high of $1.2755 in early Asia, found initial support around

$1.2700 before Europe countered a recovery to $1.2720 then shoved rate down to

$1.2619. Cable edged back to $1.2644 into NY, the eventual break above $1.2680

providing the impetus to take it on to $1.2746 into the European close. Partial

US equity recovery was seen aiding the move but most suggested that position

adjustments ahead of FOMC provided the main directional drive. Focus Wednesday

rests solely on the shoulders of the FOMC, with markets watching carefully for

any mention of yield curve control or forward guidance. EUR/GBP bounced off its

early Europe low of Gbp0.8864, met resistance around key technical 10-dma at

Gbp0.8940, easing to Gbp0.8900 at the European close. Whilst rate holds below

10-dma seen keeping sterling tone buoyant. 

- Cable support $1.2630/20, $1.2600. Resistance $1.2746/55, $1.2778(76.4%

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