Tuesday's break below the 10-dma......>

EURO-STERLING: Tuesday's break below the 10-dma (Gbp0.8527) provided the

technical impetus for a deeper corrective pullback toward the base of the 1.0%

10-dma envelope, at the time came through at Gbp0.8442, the rate touching a a

late low of Gbp0.8452, closing the year at Gbp0.8459. Cable month-end demand

outpaced EUR/USD's month-end rise and in turn drove EUR/GBP to those lows. Rate

consolidated these lower levels into Asia before it edged to a high of Gbp0.8492

but move ran into willing sellers placed toward Gbp0.8500, pressing rate back to

Gbp0.8472 in early Europe. 

- Whilst rate remains below its 10-dma(by time currently at Gbp0.8522) it will

keep the underlying bearish tone in place with support now seen at Tuesday's low

of Gbp0.8452, the base of the 1.0% envelope coming through at Gbp0.8436.

- No sign of month-end EUR/GBP demand, which can overhang into the new month,

but traders will be watching.