Sharp rise in the cross saw rate......>

EURO-STERLING: Sharp rise in the cross saw rate post a high Thursday of

Gbp0.8955, as markets reacted to the softer than forecast UK Retail Sales data

which provided another knock to the August rate hike outlook(though still

expected). The move met resistance around the top of the 1.0% envelope (drawn

around the 10-dma), which today has edged up to Gbp0.8965. Rate tends not to

like moving outside of this envelope and failure can prompt a reversal.

Resistance above seen at the 2018 high of Gbp0.8967(May7)through to Nov28'17

high of Gbp0.8981. Support Gbp0.8944 ahead of Gbp0.8903. The 10-dma currently

comes through at Gbp0.8876. Ongoing Brexit concerns, along with release of

softer UK data, could keep the pressure on sterling so it is difficult to see a

cross reversal happening. However, if the rate does nudge higher it will take

the 10-dma along with it, at the same time nudging the envelope higher with it,

which could allow for a little more upside room.