The pound came under selling pressure from the European open, re: a reduction in risk appetite on global stock market losses. EUR/GBP tripped stops above 0.6850 en route to an eight-month peak of 0.6867, with GBP/USD tripping stops below 1.9250 en route to eight-day lows circa 1.9220. 1.9250 is now a sterling resistance level.
Upper obstacles include 1.9266 (today's Asian session base), 1.9321 (today's Asian session top), and 1.9355. Bear targets south of 1.9220 include 1.9200 and 1.9185 (March 5, 15-week low). EUR/GBP exotic option barriers are located at 0.6875 and 0.6900. These are One Touch options, due to expire this summer, carrying a cumulative E9mn payout.
UK rate hawks touting another 25bp base rate hike to 5.5% either next month (April 5) or in May have elicited a boost from the 09:30GMT disclosure that annualized UK average earnings rose by an above-forecast 4.2% in the three months to January. A 4.0% increase was expected. The US Q4 current account deficit will be revealed at 12:30GMT. It is forecast at $203.0bn, from $225.6bn in Q3.
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