Sterling traders are closely watching today’s key CPI data release later today with the currency pair sitting close to key technical resistance. The headline year-on-year number is expected to show a 0.1% decrease to come in at 1.9% and therefore under the 2% target level which could push forward hopes for rate cuts from the Bank of England, with the next meeting due on the 1st August. Cable is sitting just under trendline resistance on the hourly charts and the key psychological level at 1.3000 and a higher-than-expected print could see a move higher and a continuation of the recent trend.
A result significantly below that expected 1.9% print and lower that the 3.4% Core CPI number would see the pound drop back into recent ranges against the dollar and shake out some of the long positions in the market. Short-term trendline support is coming in around the 1.2930 level with the 200-Day Moving Average below that at 1.2878.
Resistance 2 : 1.3125 – 2023 High
Resistance 1 : 1.3000 – Trendline Resistance and Key Psych Level
Support 1 : 1.2930 – Trendline Support
Support 2 : 1.2878 – 200 Day Moving Average
