GBP/USD outlook: Cable falls further after below-forecast UK January inflation

Slobodan Drvenica Windsor Brokers

GBP/USD

Cable extends weakness into second straight day, initially deflated by stronger dollar on unexpectedly hot US inflation on Tuesday, while today’s softer than expected UK CPI data raised bets for BoE rate cut by June and added pressure on sterling.

Wednesday’s drop broke below 200DMA (1.2562) and pressured pivotal Fibo support at 1.2525 (38.2% of 1.2037/1.2827 rally / Feb 5/6 lows).

Daily close below 200DMA is seen as a minimum requirement to keep fresh bears in play, while firm break of 1.2525 would generate reversal signal and open way towards next key supports at 1.2458/32 (daily cloud base / 50% retracement).

Falling 10DMA (1.2615) marks initial resistance, guarding upper pivots at1.2650 zone (converged daily Tenkan/Kijun-sen) and 1.2690 (daily cloud top).

Res: 1.2615; 1.2650; 1.2670; 1.2690.
Sup: 1.2525; 1.2500; 1.2488; 1.2432.

Interested in GBP/USD technicals? Check out the key levels

1. R3 1.2775
2. R2 1.2732
3. R1 1.266
PP 1.2617
1. S1 1.2545
2. S2 1.2502
3. S3 1.243

Author

Slobodan Drvenica

Windsor Brokers

Industry veteran with over 22 years’ experience, Slobodan Drvenica joined Windsor Brokers in 1995 when he was an active trader for more than 10 years, managing the trading desk and own account departments.

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