GBPUSD rallies above trendline resistance on weak US CPI; brighter outlook for the UK economy
Cable surged through trendline resistance (1.3930) after data showed US inflation slowed in February.
CPI rose 0.2% previous month, matching the forecast but falling well below previous month’s 0.5% rise, signaling that expected pickup in inflation will be likely gradual.
Inflation report came after Jobs data last Friday which cooled expectations for stronger pace of US rate hikes in 2018, with weak CPI numbers expected to add further negative sentiment.
Sterling was also supported by positive remarks from UK FinMin Hammond in his half-yearly update on the economy and public finances, showing brighter outlook for the UK economy.
Lift above trendline resistance (which also marks Fibo 61.8% of 1.4069/1.3711 bear-leg) is strong bullish signal for acceleration towards initial barrier at 1.40 (daily cloud top) with possible extension towards 1.4069 (26 Feb lower top).
Close above bear-trendline is needed to confirm scenario.
Res: 1.3985; 1.4000; 1.4069; 1.4100
Sup: 1.3930; 1.3914; 1.3874; 1.3850