Updating time : 31/10/2007 00:20 GMT

GBP/USD - 2.0678...The British pound retreated briefly to 2.0565 in European morning due to cross unwinding in sterling on speculation of a possible interest cut by Bank of England in the coming monetary policy meeting, however, renewed dollar's weakness against other European currencies pushed cable to a fresh 26-year high of 2.0705 in New York after the release of much weaker-than-expected U.S. consumer confidence n ahead of today's expected Fed rate cut.

Y'day's breach of 2.0656 (July high) confirms MT uptrend has resumed n further gain to 2.0723 (50% proj. of 1.8517-2.0656 fm 1.9653) n then twds 2.0761 (1.236 times ext. of 1.9653-2.0366 fm 1.9880) is envisaged, however, the high readings on hourly n daily oscillators shud prevent strg gain abv there n reckon 2.0798 (equality proj. of 2.0258-20575 measured fm 2.0481) shud limit upside n yield a much-needed minor correction later.

Therefore, buying cable is still favoured in anticipation of such move n only below 2.0565/67 (y'day's low n 62% r of 2.0481-2.0705) wud signal temp. top is made n bring retrace. to 2.0534 (38% r of 2.0258-2.0705) but 2.0481 wud hold.

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