Cable ticked higher in European trading on Wednesday, showing no significant reaction on overall negative UK economic data (GDP was flat in April/construction and manufacturing output fell sharply) as traders await release of US CPI data and signals from Fed at the end of two day policy meeting.
US inflation is expected to ease while the central bank is widely expected to keep the policy unchanged again, with focus on Fed’s projections, which would provide fresh signals about the timing and pace of rate cuts.
Traders also focus on BoE’s next week policy meeting, with the central bank likely to keep interest rate unchanged for the seventh consecutive time.
Improving daily studies (rising momentum/Ma’s mainly in bullish configuration) underpin near-term action, with long shadows on last two daily candles, pointing to strong bids.
However, sustained break above 1.2753 pivot (Fibo 76.4% of 1.2893/1.2299 / 10DMA) is needed to confirm signal.
Bullish near term bias expected as long as the price stays above rising 20DMA (1.2736), while return below1.2680 higher base will be bearish.
Res: 1.2768; 1.2786; 1.2803; 1.2817.
Sup: 1.2736; 1.2680; 1.2666; 1.2638.
