Forex Market Update: British Pound Advance Falters

Cable experienced a strong defense of 1.6000, with an early run higher meeting decent Asian account selling pressure at its new 1.5945 trend highs. The retracement extended to 1.5845, although we are anticipating ongoing demand on dips as the speculative market continues to position for a break of the key psychological level and a test on the 1.6050 resistance. Equity markets were mixed overnight, which offered little for Cable’s upside momentum and some dollar buy backs have been evident in early Europe. North Korea’s continued to defiance despite Western pressure was a source of safe haven demand and Monday’s article on continued appetite for U.S. Treasuries from China will temper aggressive dollar sales. U.K. watchers will be encouraged over the economic assessment from BoE’s Sentance, who highlighted that the worst of the U.K. downturn has passed, although there was not clear indication over how robust the recovery would be. GBP looks as if it will be driven by external factors amid a clear U.K. data schedule, leaving Euro-Zone data and equity markets as leading influences.