Cable remains supported at the beginning of the week and consolidating under fresh recovery high at 1.3224 in early Monday.
Strong rally last week formed long weekly bullish candle which underpins for further upside and eventual retest of key short-term barrier at 1.3268 (03 Aug high), however, overbought daily studies warn of rally’s stall but without stronger signals so far.
Key releases from UK, due this week are in focus and could have stronger impact on pound.
UK inflation numbers for August will be released on Tuesday, with forecasts higher than previous month’s figures (2.8% y/y vs 2.6% in July and 0.5% m/m vs -0.1% in July) could be supportive on release at/above consensus.
UK jobs data are due on Wednesday, with Average earnings expected to rise in July 2.3% vs 2.1% in June) but UK Jobless claims are forecasted higher (0.6K in Aug vs -4.2K in July) while Unemployment rate is expected to stay unchanged at 4.4% in July.
BOE MPC is meeting on Thursday to decide about the monetary policy. Interest rates are expected to stay unchanged at 0.25%, as well as QE (435billion pounds) but focus will be on MPC’s vote for rate hike, with expectations for 7-2 configuration this time.
Monday’s action found footstep at 1.3167 (broken upper 20-d Bollinger band and bounced above cracked hourly Tenkan-sen/Kijun-sen lines which remain in bullish setup and supportive for fresh upside.
Conversely, break below 1.3167 would risk dip towards strong supports at 1.3092 (Friday’s low),1.3082 (Fibo 38.2% of 1.2852/1.3224 upleg) and 1.3075 (daily cloud top).
Res: 1.3224, 1.3268, 1.3300, 1.3346
Sup: 1.3167, 1.3136, 1.3082, 1.3075
