Cable plumbed one-month lows just shy of 1.9760 bids in early European trade, on the back of Eastern European GBP/JPY selling. More bids are tipped at 1.9750, with some stops sub-1.9750. A large 1.9700 option strike rolls off at today's 14:00GMT NY cut. 1.9771 was today's Asian session base.
1.9800 is now a resistance level. Stops below 1.9800 were tripped yesterday, following good size Middle Eastern selling of cable. Above-figure obstacles include 1.9815 (today's Asian session peak), 1.9830 and 1.9850.
Outgoing UK PM Tony Blair has endorsed Chancellor Gordon Brown as his successor (FT website). Blair will step down as PM on June 27.
EUR/GBP offers are touted at 0.6820, with some stops above. Earlier this week, a US investment house recommended going long at 0.6800, targeting 0.7000.
US April retail sales and producer price data is due at 12:30GMT. Retail sales forecast: +0.4% m/m, ex-autos +0.5% m/m. Headline PPI forecast: +0.6% m/m, +3.1% y/y. Core PPI forecast: +0.2% m/m, +1.8% y/y. March business inventories ensue at 14:00GMT. Forecast: +0.3% m/m.
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