Large triggered buy-stops above 1.9750 have helped inflate cable to 10-week highs circa 1.9780. The pound is continuing to benefit from the risk that the BoE MPC might hike the UK base rate by another 25bp to 5.5% as early as this Thursday, as recommended by the "Shadow" MPC, by an 8-1 vote (Sunday Times). A 25bp UK rate rise is priced in for this quarter.
Touted bull targets north of 1.9780 include 1.9850, a level at which there is exotic option exposure, and 1.9917 (Jan 23, 15-year high). Further option barriers are located at 1.9900, 1.9975, 1.9995 and 2.00+. 1.9750 is now a pullback support point.
Lower props include 1.9740 (London morning high), 1.9718 (Friday's top) and 1.9698 (today's Asian session peak). Today's key US event risk is the 14:00GMT disclosure of March's ISM manufacturing index. A fall to 51.1, from 52.3 in February, is forecast. The prices paid index is forecast at 59.0.
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