Sterling Retains Buoyant Feel

Sterling holds most of its gains, cable touched an extended high of $1.2953
high Tuesday, after reported stops were triggered on break of $1.2910. Fix
related buying aided the move though post fix trade saw only shallow
pullbacks before it touched the high. Rate drifted lower through to Tuesday's
close of $1.2931, Asia extending the move to $1.2912. Rate recovered
to $1.2937 before it settled around $1.2920 into Europe. Fresh demand has
emerged in Europe which has edged it back to $1.2934. Markets await to
see if there is any action around 0800BST when momentum accounts begin
to trade. EUR/GBP has edged back to its key technical 10-dma, currently at
Gbp0.9084. Month-end interest may see demand emerge which could counter
sterling's general upside progress. Also, Friday month-end is
today's value and we could see US corporate USD demand emerge in NY which
could also provide a counter for GBP progress, but difficult to stand
in the way of the current trend.
Support $1.2910/00, $1.2860/50. Resistance $1.2950/55, $1.2980, $1.3000.