Bulls look for a catalyst to finally break 100DMA; UK CPI and Fed eyed for signals
Cable is holding within narrow consolidation around pivotal 1.25 resistance zone (100DMA / Fibo 38.2% of 1.3381/1.1958) after fresh advance on Tuesday repeatedly failed to clear barrier.
Uptrend from 1.1958 remains intact and maintains strong bullish momentum, with narrow consolidation near recovery rally highs, also seen as positive signal.
Bulls look for a catalyst for eventual break higher that would expose 1.2669 (50% retracement of 1.3381/1.1958) and bring in focus 200DMA (1.2735), however, scenario of extended range between key support/resistance at 1.2400 (daily cloud top / 100DMA) cannot be ruled out, as daily stochastic is in sideways mode and moving around overbought zone border line.
Only firm break below daily cloud top would put bulls on hold and signal deeper pullback, with weak sentiment on persisting Brexit uncertainty, supporting this scenario.
UK CPI data are key event for sterling in the European session. Forecast show Aug inflation lower (1.8%) after surprise jump above BoE’s 2% target in July (2.1%).
Strong inflation numbers today would additionally support pound for final break above 100DMA pivot.
Res: 1.2500; 1.2526; 1.2558; 1.2579
Sup: 1.2443; 1.2400; 1.2385; 1.2323