Cable is defying its critics, bouncing strongly from a probe of the 1.6050 area earlier in the session and absorbing offers in the 1.6100 area in the process. Earlier today a US custody bank is rumored to have sold as much as GBP 750 mln, helping the pound make new lows. A move back above the 1.6140 area should see a more significant short-squeeze unfold and signal a near-term bottom is in place.
As ever, keep an eye on US equities today. A break below 875/880 support in the S&P should unleaseh a fresh wave of risk aversion and dollar buying.
