Sterling benefits from slightly higher than expected UK CPI
Cable bounces from new five-month low in early Wednesday, following higher than expected UK inflation in March, which eases pressure on BoE to start cutting interest rates as early as next month and inflates pound.
Overall technical picture on daily chart is firmly bearish but oversold conditions to signals for correction.
Fresh gains cracked initial resistance at 1.2477 (Fibo 23.6% of 1.2709/1.2405 bear-leg, which guard more significant barriers at 1.2500/20 zone (psychological / former lows / Fibo 38.2%) and 1.2550 (10DMA / 50% retracement.
The latter barrier should cap upticks to mark a healthy correction and positioning for fresh push lower.
Death-cross (10/200DMA) and converging 20/200DMA’s in attempt to form another death-cross, contribute to scenario.
Res: 1.2498; 1.2521; 1.2550; 1.2578
Sup: 1.2400; 1.2364; 1.2289; 1.2239
