Cable fell to two-week low on Wednesday on softer than expected UK February inflation data that fuel expectations for BoE rate cut in May.
Fresh weakness pressure support at 1.2883 (20DMA / last Friday’s low) break of which to open way for deeper correction (dips from new multi-month high at 1.3014 were so far shallow) and expose next significant support at 1.2798 (200DMA / Fibo 23.6% of 1.2099/1.3014 rally).
The notion could be supported by negative signals developing on weekly chart (overbought conditions / double weekly Doji with strong upside rejection last week).
Also, the price returned into rising weekly Ichimoku cloud, with close within the cloud to add to negative signals, along with potential monthly bull-trap above 1.2924 Fibo resistance).
On the other hand, economists are not very optimistic and expect inflation to remain sticky, with lower February numbers to be seen as temporary improvement rather than sustained easing in price pressures.
In such scenario, price adjustment is likely to remain limited with shallow dips to signal that larger bulls hold grip and on track for fresh advance after consolidation.
Res: 1.2952; 1.2989; 1.3000; 1.3042.
Sup: 1.2883; 1.2861; 1.2798; 1.2715.
