Currency traders are preparing for big moves later in the trading day as the US CPI data is due to set the tone for the dollars progress in the weeks ahead. Most of the major currencies are poised at good technical levels and given the lack of clear guidance from the Fed Chair this week in his testimonies to Congress, many consider that this data’s impact will be more significant in terms of shaping when the decision is made to cut rates.
Cable has seen a good move overnight and hit a one month high after the Bank of England’s Chief Economist advised that price pressures remained persistent, which pulled back on many investors hopes for an early rate cut from the MPC. If this more hawkish outlook from the Bank coincides with a weaker print for the US CPI, then we can expect Cable to break higher in fresh ranges. We also have UK GDP numbers early in the London time zone which could see some initial volatility, but traders are expecting the CPI data to dominate the moves in the pair today.
The monthly US CPI numbers are expected to show a 0.1% month-on-month increase for the headline figure with the Core data coming in +0.2%, whilst the year-on-year data is expected to show a 0.2% decrease coming in at 3.1%, reinforcing that slowing data that is pushing for swifter rate cuts and putting pressure on the dollar. Most traders expect the bigger risk to sit with a surprise higher print which could turn recent trends on their head and give more ‘bang for your buck’, which would push cable back into recent ranges.
On the longer-term Daily chart, Cable is sitting just under the resistance trendline and 2024 high and a break here could take it up to challenge the 2023 high at 1.3150 whilst bears will use the level as a s/l for short positions if the CPI prints higher.
Resistance 2: 1.3150 – 2023 High
Resistance 1: 1.2920 – Trendline Resistance and 2024 High
Support 1: 1.2575 – Trendline Support
Support 2: 1.2296 – April Low
![](https://www.icmarkets.com/blog/wp-content/uploads/2024/07/Cable-Daily-2.png)