Strong recovery in CBI Business optimism,.....>

CABLE: Strong recovery in CBI Business optimism, released Wednesday, provided

sterling with another upside pick as it extended its recent recovery. The pound

had floundered in recent sessions following dovish comments from BOE MPC

members, disappointing data and comments from Chancellor Javid concerning the

UK's future relationship with EU rules. All of these points had market adjusting

outlook for a possible rate cut at the Jan30 BOE meeting. This has been tempered

by the stronger than forecast UK jobs data and CBI with attention set on

Friday's post election flash PMI's. As mentioned in an earlier bullet, the BoE

may be paying extra attention to its own internal models & surveys, with a

degree of added prudence owing to a desire to not be wrong-footed, given

previous criticism. Cable extended its recovery from Monday's $1.2962 low to

$1.3153 Wednesday, corrective pullback finding support at $1.3120. Rate touched

$1.3151 in early Asia, on Australian jobs react before again testing $1.3120

into Europe. 

- Support $1.3120, $1.3100, $1.3085/80. Resistance $1.3150/55, $1.3170, $1.3112.