Sterling was lifted by upbeat UK jobs data and expectations for hawkish BoE, as inflation is forecasted to rise to multi-decade high
Cable extends rebound from new 2022 low into third straight day and accelerates recovery on Tuesday after upbeat jobs data.
UK unemployment fell to 3.7% in March, the lowest since 1975, improving the sentiment on rising bets for BoE 50 basis points hike on June 16 policy meeting that would lift interest rate to 1.5%.
Markets focus Wednesday’s UK CPI data on Wednesday with inflation expected to rise to a 40-year high at 9.1% in April from 7% in March that would add to BoE’s hawkish expectations and give fresh boost to the pound.
Improving daily technical studies support the notion as 14-d momentum is in steep ascend and approaching the midline which divides positive and negative territory and RSI is heading north after reversal from oversold zone.
Fresh advance broke above 10DMA (1.2348) and extended towards pivotal barrier at 1.2512 (Fibo 38.2% of 1.3090/1.2155 bear-leg / falling 20DMA) with firm break here to allow for stronger correction.
Broken 10DMA offers solid support and the price should hold above here to keep fresh bullish bias.
Res: 1.2512; 1.2534; 1.2600; 1.2622
Sup: 1.2411; 1.2375; 1.2348; 1.2311