Sell interest at 1.9680 kept a lid on cable in early European trade, following its break through 1.9664 (today's Asian session top). Much of the blame for sterling's subsequent three-quarter cent drop to 10-day lows under 1.9600 was attributed to Greg Ip's claim that the Fed is likely to reaffirm its "bias" towards raising interest rates, rather than lowering them, when its two-day meeting concludes next Wednesday (WSJ).
Touted stops below 1.9590 could spur fresh downward momentum if tripped. 1.9590 is an approximate 50% Fibo retracement point of the ascent from 1.9260 (Jan 8 low) to 1.9917 (Tuesday's 15-year high). There is talk that 1.9570 and 1.9550 option strikes might roll off at today's 10am EST NY cut (15:00GMT). 1.9610 is now a rebound resistance level. Upper obstacles include 1.9626 (yesterday's low), and 1.9645 (Wednesday's floor).
US December durable goods orders will be disclosed at 13:30GMT. Forecast: +3.0% m/m, ex-transport +0.5% m/m. US December new home sales ensue at 15:00GMT. Forecast: 1052k.
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