I think what you are looking for is described here:
As soon as the weather is determined, the German player must record the number of Supply Points received by moving the 7th Army and/or the Fortress Cherbourg marker on the General Records Track. Fortress Cherbourg may only receive Supply Points if any of the three City hexes of Cherbourg can trace a Line of Supply (18.2) to the south map edge. Once Supply Points are placed in 7th Army or in Fortress Cherbourg, they cannot be transferred. When all Cherbourg City hexes are under Allied control (2.2.5), remove the Cherbourg Fortress marker from the General Records Track; any accumulated Cherbourg Fortress Supply Points are lost.
Then under rule 17.2:
GERMAN HQs: A German HQ that can only trace a Supply Line to Cherbourg must use Fortress Cherbourg Supply Points (5.2 and 18.2). A German HQ that can only trace a Supply Line to a map edge Entry Hex must use 7th Army Supply Points. A German HQ that can trace to both can use either.
Does that clarify for you?
I would strongly encourage you to download the latest living rules from GMT at: http://www.gmtgames.com/normandy44/N44-RULES-2ndEdition.pdf
Being able to electronically search can be a huge time saver.