Tripped stops helped depress cable to three-day lows just shy of 1.9460 in early European trade. Sterling's subsequent recovery to 1.9516 (today's Asian session base) was aided by good size UK clearer selling of EUR/GBP. That selling deflated the cross to a one-week low of 0.6708. Touted offers at 1.9550 are a bull target/appreciation obstacle north of 1.9516.
1.9547 was today's Asian session top. 1.9549 was yesterday's post-MPC minutes peak. 1.9592 was yesterday's pre-MPC minutes high. 1.9430 and 1.9400 are support points south of 1.9460. Lows just shy of 1.9430 were plumbed on Monday. BoE Chief Economist Charles Bean says that upside and downside risks to the UK inflation outlook are dividing MPC members and making it difficult to predict where the base rate goes next.
Bean, who voted against January's UK rate hike to 5.25%, predicts a sharp drop in CPI this year, saying it could even fall "well below" the BoE's 2.0% target level (Reuters). Today's key US event risk is the 13:30GMT disclosure of weekly US jobless claims. Forecast: 325k.
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