Foreign exchange traders are preparing for a busy final session today, with the key US CPI data due to come out early in a New York session that is likely to be preceded by relatively quiet days in both Asia and Europe. Expectations are for a 0.3% month-on-month increase for the CPI and Core CPI numbers and a 2.9% increase for the year-on-year data. Anything off those prints should see big moves in the market, and anything more than 0.2% will see large moves. Stronger data will put the Fed under pressure to pull interest rate expectations further down the track and will see the dollar take off, whilst weaker prints will see a continuation of recent dollar weakness and pull rate cut expectations in.
Cable is looking like one of the best pairs to trade on the data, and we could see significant moves if we do get those prints off expectations. It has rallied nicely up to levels just north of 1.2400, and a weaker result will see it challenge the topside resistance trendline on the hourly chart near 1.2500. A stronger number opens the way for a move swiftly back to recent levels, with support at 1.2320.
Resistance 2: 1.2549 – 2025 High
Resistance 1: 1.2500 – Trendline Resistance
Support 1: 1.2320 – Trendline Support
Support 2: 1.2242 – February Low
