Cable regained strength and accelerated above 1.2900 handle in early European session on Tuesday, awaiting release of UK inflation data. Monday’s pullback from upside rejection at 1.2938 was contained by rising 20SMA at 1.2879, keeping broader bullish bias intact. Daily bulls are back to full capacity on today’s rally above 10SMA/daily Tenkan-sen (1.2915/08), signaling possible attack at psychological 1.3000 barrier for break above near-term 1.2830/1.2987 congestion. Annualized inflation for April is seen accelerating in April according to the forecast at 2.6%, compared to 2.3% in March, while monthly figure is expected to stay unchanged at 0.4%. Core CPI is also seen higher, as forecast for April lies at 2.2%, up from 1.8% in March. Release at forecasted levels or upside surprise would be supportive for sterling for probe above psychological 1.3000 and test of another strong barrier, base of thick weekly cloud, currently at 1.3032. On the other side, weaker than expected inflation numbers would put the pound under fresh pressure and risk break below pivotal support at 1.2830 (04 May low).
Res: 1.2946, 1.2986, 1.3000, 1.3032
Sup: 1.2915, 1.2889, 1.2877, 1.2843
