Rate reversed away from its 1.0%......>

EURO-STERLING: Rate reversed away from its 1.0% envelope top Friday (Gbp0.8890),

and with the help of a stronger than expected UK Q1 GDP, allowed rate to extend

its pullback to Gbp0.8836 ahead of the weekly close. Rate touched a low of

Gbp0.8832 as early Asian markets reacted to the resignation of Germany's

Seehofer as CSU party chairman and Merkel's Interior Minister, but quickly

jumped back to Gbp0.8855 as sterling came under pressure from weekend Brexit

headlines. Rate has since settled around Gbp0.8840 into early Europe. The

topside 1.0% envelope, drawn around the 10-dma, has today moved up to Gbp0.8897,

whilst the 10-dma is currently around Gbp0.8808. First day of the new month may

see some hangover of month-end demand, though this interest was well countered

on Friday. Resistance now seen at Gbp0.8886/90 ahead of Gbp0.8900. Support

Gbp0.8832/21. UK Manufacturing PMI due this morning at 0830GMT, median forecast

54.0 vs 54.4 last. Market to be on headline watch for German political situation

as well as Brexit.