Cable came under fresh pressure on Tuesday and looks for retest of new multi-month low (1.2099) after recovery from Monday’s strong downside rejection failed repeatedly at 1.2250 zone.
Bears regained control after a mild correction, with loss of 1.2099 low (also monthly cloud base) to open way for test of 1.2037/00 targets (4 Oct 2023 low / psychological).
Daily studies remain in full bearish setup, though oversold conditions may keep near term action on hold for some time.
Upticks are likely to be limited and ideally capped under 1.2350/60 zone falling 10DMA / broken Fibo 76.4% support) as fundamentals are dollar positive.
US Dec PPI missed expectations but came above previous month’s figure (y/y), which signals that inflation remains elevated and to further soften Fed’s rate cut outlook for 2025.
Markets focus on UK and US December inflation reports (due on Wednesday) which would further pressure pound, as price pressure is expected to rise, and UK economy remains on fragile legs.
The dollar would benefit more from the anticipated implementation of tariffs, proposed by Trump’s administration, even on the latest comments that tariff implementation might be gradual at the beginning.
Res: 1.2250; 1.2299; 1.2360; 1.2400.
Sup: 1.2099; 1.2069; 1.2037; 1.2000.
 after recovery from Monday’s strong downside rejection failed repeatedly at 1.2250 zone.){kind=link}