Cable Back To Flat On CPI, Initial Technical Support Breached In Asia

GBP/USD trades back to flat on the firmer than expected round of domestic CPI data (Asia-Pac reaction to Monday’s USD bid/fundamental drivers dominated overnight), adding ~30 pips vs. pre-release levels to trade around $1.2640 before shedding a few pips.

• As noted elsewhere, the although the data was firmer than broader consensus, it still printed lower than BoE expectations.
• Initial support in the form of the Jan 3 low & 50-day EMA was pierced overnight. Our technical analyst previously suggested that s breach of these levels would indicate a short-term top and increase the risk to the bullish technical theme. Bears will look for a break of today’s low ($1.2597) to open the way lower. Conversely, initial resistance is seen at the Dec 28 high/bull trigger ($1.2827).