Cable rallied to an intra-week peak just north of 1.8850 during the European morning, as the continent absorbed the fact that yesterday's FOMC statement was less hawkish than some had feared. The pound also benefited from an upbeat assessment of the UK growth outlook from Chancellor Brown (FT).
Touted offers at 1.8860 represent an obstacle to additional appreciation. The offers reside a pip above last Friday's high. Some stops are tipped above 1.8870/75. These could inflate the rate towards 1.8900 if tripped. Further sell interest is expected to emerge ahead of 1.8900--a level at which exotic option barriers reside.
These are the peak triggers of Double No Touch options, carrying a cumulatively estimated GBP 10 million payout, which are slated to expire next April. 1.8899 was the October 3 high. US September durable goods orders will be disclosed at 12:30GMT, alongside weekly jobless claims.
Durable goods orders forecast: +1.0% m/m, ex-transport +2.0% m/m. Jobless claims forecast: 307k. September new home sales will be revealed at 14:00GMT. Forecast: 1040k.
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