Cable firmed on Tuesday, sidelining immediate downside risk following Monday’s close in red and formation of bearish Outside Day which is negative signal.
Near-term action is holding in narrow range within thick hourly cloud, base of which contained Monday’s weakness, marking significant support at 1.3225, which guards 10SMA pivot at 1.3205.
Mixed daily studies show no clear direction while the price is holding between 10 and 20 SMA’s (1.3205 / 1.3311 respectively).
Dip on profit-taking of recent strong rally (1.3026 / 1.3337) was so far shallow, with near-term focus turning towards release of UK inflation data today.
Annualized CPI is expected to rise in September, according to the forecast at 3.0% vs 2.9% in August.
Release above 3.0% would be supportive for Sterling and could spark fresh rally towards Friday’s recovery high at 1.3337.
Conversely, disappointing numbers in September could lead to fresh weakness below 1.3205 (10SMA) and 1.3182 (daily Tenkan-sen) and signal an end of corrective phase from 1.3026.
Res: 1.3287, 1.3311, 1.3337, 1.3415
Sup: 1.3225, 1.3205, 1.3182, 1.3145
