The monthly two-day BoE MPC meeting begins today. The Old Lady is expected to keep the base rate at 5.25%, although there is a risk that it might hike by another 25bp to 5.5%. Sell interest at 1.9323 (yesterday's high) kept a lid on cable in early European trade, as it pushed its recovery envelope from an Asian session low of 1.9260.
That low was plumbed on the back of a good size Japanese GBP/JPY sell order, reportedly relating to a GBP 12.0bn Gilt redemption. Support points south of 1.9260 are noted at 1.9250, 1.9230, 1.9200 and 1.9185 (Monday's 15-week floor). 1.9355/65 is a resistance window north of 1.9323. The window encompasses today's 1.9359 Asian session high. 1.9365 is a 38.2% Fibo retracement point of the fall from 1.9674 (Feb 27 high) to 1.9185.
News-wise: Jack Straw is the new favourite to become Gordon Brown's Chancellor after Tony Blair leaves Number 10, according to the Daily Telegraph. The Fed's Moskow speaks at 18:00GMT, with the Fed's Beige Book ensuing at 19:00GMT. US consumer credit data is due at 20:00GMT.
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