Cable eases from new eight-month high ahead of key economic data

Cable eases on Monday after last week’s 1.6% rally (the biggest weekly gain since the second week of November) hit eight-month high (1.2893).

Profit-taking and risk aversion contributed to fresh weakness, which so far looks as positioning for Tuesday’s UK labor data and US inflation report, which are expected to generate direction signals.

Overbought daily studies prompted traders to collect some profits, ahead of releases of key economic data, particularly US February CPI numbers, which will provide more details about the Fed’s path towards the start of cutting rates.

Sterling would receive fresh boost if US inflation shows signs of further cooling in February and reinforce expectations for the first rate cut in June.

Sustained break above cracked 200WMA (1.2856) and Fibo 76.4% of 1.2141/1.2037 (1.2881) would boost bullish structure for acceleration towards psychological 1.30 barrier and unmask 2023 peak (1.3141).

Dips should ideally find support at 1.2800/1.2780 zone, while deeper pullback would focus targets at 1.2720/10 and 1.2670 in extension.

Res: 1.2856; 1.2881; 1.2900; 1.3000
Sup: 1.2800; 1.2780; 1.2712; 1.2670