Cable rallied through the peak of today's 1.9598-1.9645 Asian session range from the European open, on the back of good size GBP/JPY buying from a UK clearer. Cable scaled a five-day peak just shy of 1.9700 on the back of that GBP/JPY buying, with a half-cent+ pullback ensuing once the GBP 2.0bn cross buy order was completed.
Touted offers at 1.9720 represent an appreciation obstacle north of 1.9700. Sub-1.9598 support points include 1.9548 (yesterday's 17-day low), and 1.9510. The latter level is a 61.8% Fibo retracement point of the ascent from 1.9260 (Jan 8 low) to 1.9917 (last Tuesday's 15-year high). NIESR has warned that UK CPI will fall back to its 2.0% target level this year--but not as swiftly as previously thought (Reuters).
UK CPI is currently at an 11-year high of 3.0%. NIESR has also upwardly revised its 2007 UK GDP growth estimate to 2.75%. The think-tank forecasts UK GDP growth of 2.4% next year. January"s US consumer confidence gauge will be disclosed at 15:00GMT. Forecast: 110.0, from 109.0 in December.
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