Stretched its recovery Tuesday to.....>

EURO-STERLING: Stretched its recovery Tuesday to bring pressure to bear on the

topside of its 1.0% 10-dma envelope at Gbp0.8841, eventually edging to Gbp0.8852

in late NY trade. Sterling was under pressure after BOE Broadbent declined to

rule out negative interest rates, pressure remaining into Asia as traders

adjusted positions ahead of this morning's release of UK GDP, IP/Mfg and Trade

data (0600GMT). GDP Q1 (prelim) to provide main focus, forecast to come in at

-2.6%qq, -2.2%yy. The cross edged up to an extended high of Gbp0.8855 in early

Asia before it gradually pared those gains back to Gbp0.8838 into Europe. The

topside of the 1.0% envelope, by time, has nudged up to Gbp0.8853. If rate fails

to make a clear break above this level it could lead to a sharp pullback toward

its 10-dma, currently at Gbp0.8765. Next resistance seen at the Apr23 high of

Gbp0.8863 ahead of Gbp0.8880/85, as well as leaving the top of the 2.0% envelope

exposed at Gbp0.8940.