Today’s CPI release from the UK is seeing more interest than usual as the consensus forecast calls for the figure to fall back into the target of 2.0%. Should we get things as expected then it would suggest that expectations of a rate cut in August will push through. Fail to push to zero and market will be questioning the start of the UK’s own easing cycle potentially boosting the currency higher across the board, particularly against the Euro.
Resistance
- 1.27631 – Intraday Consolidation Lows
- 1.27426 – 20D Moving Average
- 1.27220 – Intraday Lows / High
Support
- 1.26689 – Tuesday’s Low
- 1.26422 – Intraday Consolidation Low
- 1.26174 – 50D Moving Average
GBPUSD will likely be driven largely by today’s CPI data. That said we also have an interesting technical picture to consider as our daily charts has us at the bottom of our broadening pattern and stochastic crossing up. Moving intraday we also see a double bottom in the hourly charts providing a well defined scenario for us. A strong CPI read coupled with a push past yesterday’s high of 1.27220 wil have us looking for the mid-point of our broadening pattern. A read below 2.0% could lead to what broadening patterns are for, a reversal. We will then consider shorts for a test of the 50D Moving Average.
