UK names again reportedly in the mix from the London open with selling from levels around 1.8715 shaping a resumption of the bear trend for Cable. Small stops were tripped on the break under 1.8690 and this activity looks to have helped nudge the Pound to 1.8662-65 lows. Any bid activity of size is not expected to surface until the low 1.86's with orders touted from 1.8635 through 1.8605, daily lows from September 29 and September 11 respectively. Technically, the market is keeping to a daily bear channel taken off the September 26 highs. The channel parameters come in at 1.8550 on the base and 1.8830 on top. The intraday action is looking a little saturated to the bear side and further scope below 1.8670 is likely to be limited until a brief corrective lift has taken hold. Look for fresh selling tight above 1.8700.
On the data front, UK Sept PPI came in below forecast with a rise of 5.2% from 7.3% in August, the steepest fall since Dec 2004. Stg staged a quick drop to 1.8660 then bounced to 1.8690, where consolidation set in. The pound wants to go lower and a slow drift towards the 1.8635 support point cannot be ruled out.
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