A strong read in UK CPI saw the British Pound break through its consolidation from the start of the week, pushing to a new one year high. Both headline and core annualized CPI turned out firmer than expected at 2.0% and 3.5% potentially pushing out the exptec rate cut this August to the next BoE MPC meeting in September instead. Also helping keep Cable afloat is continued talk of dollar vulnerability as markets focused on the weaker sectors of Tuesday’s US Retail Sales numbers.
Resistance
- 1.31421 – One Year High
- 1.3109 – Intraday Consolidation Resistance
- 1.30445 – Yesterday’s High
Support
- 1.29947 – Intraday Consolidation Resistance
- 1.29381 – Intraday Consolidation Floor
- 1.28934 – High from Feb 2024
GBPUSD triggered a flag pattern following a strong read in UK CPI, the move should open up the highs at 1.31421 from July 14, 2023. Indicator wise we are overbought in the daily stochastic and are actually coming off overbought levels in 4H charts. At this point we would look for any attempts to spike higher as a potential entry point looking for the aforesaid 2023 high. We would also look at any dip as a possible bullish entry point provided no fresh economic fundamentals is driving the market.
