Post PMI optimism has fuelled the Pound higher during European trading but the pair has been capped at 1.6005, several pips shy of 1.6025 resistance and the Sterling reversed to levels around 1.5930, approaching today's low at 1.5920. Initial support levels lies at the mentioned 1.5920 session low, and below here, the Pound might find support at 1.5880 and 1.5805 (Oct 2 low). On the upside resistance levels lie at Oct 1 high at 1.6025, and above here, next resistance levels lie at 1.6110 (End August/start September lows) and 1.6200. On a wider perspective, Karen Jones, technical analyst at Commerzbank observes the Pound targeting 1.5690/10 area: "We look for failure and continue to target initially 1.5690/10 (Fibonacci retracement and the 55 week ma) and then 1.5270. Slightly longer term it should be noted that the top measures to 1.5135."

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