Updating time : 06/05/2008 00:08 GMT

GBP/USD - 1.9738...Despite initial rise to 1.9785 y'day, cable fell sharply fm there to 1.9656 on active cross selling in sterling b4 rebounding in N.Y. afternoon in line with the greenback's retreat across the board.

Y'day's rebound fm 1.9656 suggests erratic decline fm 1.9910 (Thursday's high) has made a low there n consolidation with upside bias is seen for a retracement to 1.9783/85 (50% r of 1.9910 n y'day's high), abv wud extend gain to 1.9830/40 but 1.9898/1.9910 res area is expected to remain intact n yield selloff later (see weekly outlook).

Therefore, while buying cable on dips for day trade is favoured, readers shud be prudent n take profit on next rise as choppy trading inside the broad established range of 1.9600-2.0029 wud continue. Only a breach of 1.9624(last Wednesday's low) wud indicate 'downside break' has taken place instead,bring resumption of the fall fm 2.0399 (March '08 high) for re-test of 1.9600 n then 1.9540 (80.9% r of 1.9337-2.0399), with focus likely to be on this week's BOE rate decision (some economists are predicting a 25 b.p. rate cut)...