Cable stands at the front foot ahead of UK inflation data
Cable remains positive in early Tuesday’s trading and pressures Monday’s high at 1.3875, but recovery attempts from Friday’s low at 1.3764 so far did not show stronger gains and remain capped by broken ascending 30SMA (currently at 1.3873).
Lack of clearer direction signals comes from mixed daily indicators as slow stochastic is emerging from oversold zone and pointing higher, while 14-d momentum continues to trend lower, deeply in negative territory.
Traders are cautious ahead of today’s key event for sterling, release of UK CPI data. Inflation is forecasted at 2.9% in January vs 3.0% in Dec and under six-year high at 3.1%, posted in Nov.
Stronger than expected release would inflate pound as strong inflation would support hawks advocating scenario for rate hike in May.
Disappointing numbers, on the other side, would increase pressure and risk extension of pullback from 1.4344 peak.
Bulls need break above 30SMA (1.3873) and daily Kijun-sen (1.3901) to generate fresh bullish signal for extension towards psychological 1.4000 barrier (20SMA) and 1.4020 (daily Tenkan-sen).
Res: 1.3873; 1.3901; 1.3960; 1.4000
Sup: 1.6832; 1.3796; 1.3764; 1.3700