Cable traders are expecting to see plenty of volatility in the final two sessions of the trading day today as they contend with a one-two combination of CPI hits out of the UK and the US. First up in the London session is the latest UK CPI data release with the market expecting to see the headline figure show a 2.3% year-on-year increase, with any deviation likely to affect the chances of a Bank of England cut at the upcoming meeting in September.
Later in the day, we have the CPI numbers out of the states which is likely to have a greater impact due to the market-wide anticipation that is surrounding this event. Expectation is for the month-on-month prints to record 0.2% increases with the year-on-year coming in at a flat 3.0%. Ideally, for trend players, we have a disparity for the two which would make an interest rate differential trend come into play and attract longer-term players, however, there will be plenty for the short-term traders to use on each event as well.
Cable is currently in the middle of its recent range, but if today’s date gives a firm direction from either one side of the equation or both, then expect long-term support at 1.2700 or long-term resistance at 1.3000 to be challenged in the coming sessions.
Resistance 2 : 1.3044 – 2024 High
Resistance 1 : 1.3012 – Trendline Resistance
Support 1 : 1.2687 – Trendline Support
Support 2 : 1.2296 – 2024 Low
