Sterling long squeeze, as the UK......>

EURO-STERLING: Sterling long squeeze, as the UK were at the polls Thursday, took

EUR/GBP to a high of Gbp0.8509 before it settled around Gbp0.8450 into the

close. Early Exit Polls suggested a strong Conservative win and prompted a

strong move into sterling which dropped the cross to a low of Gbp0.8280 in its

initial reaction. Rate did grind its way to an eventual low of Gbp0.8277 before

it settled around Gbp0.8300 into Europe. Market looked to be well positioned

long sterling into the Election (despite the earlier mentioned squeeze) and

profit take sterling sales have allowed the cross to edge to Gbp0.8323.

Noticeable that the reaction failed to challenge the base of the 2.0% 10-dma

envelope, currently at Gbp0.8262, with the base of the 1.0% envelope now seen at

Gbp0.8346 which may attract. EZ and UK Services and Composite PMI's released

this morning to provide some data interest, but election fall out to remain the

key driver.