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Cable Remains In Uptrend Ahead Of Wednesday CPI Data

GBP
  • GBPUSD has risen 0.42% as of writing on Tuesday, largely reversing the prior day’s declines in line with the general greenback sentiment. The pair did receive a boost from pay and jobs data this morning, which showed average weekly earnings beating forecast on both a inc. and ex. bonus basis. Resultingly, GBP is close to the top-end of the G10 leaderboard.
  • Cable remains in an uptrend and the Friday / Monday pullback is - for now - considered corrective. Despite piercing support at 1.2364, the 20-day EMA, a clear break of this average and 1.2345, the Apr 10 low, would be needed to signal scope for a deeper pullback. On the upside, a resumption of gains would refocus attention on Friday’s 1.2546 high where a break would resume the uptrend and open 1.2599, Jun 7 2022 high.
  • For EURGBP, immediate focus remains on firm support at 0.8804, the 20-day EMA. Resistance comes in at 0.8866, the Mar 23 high.
  • On Wednesday, we have UK March CPI data where the headline annual rate is expected to moderate to 9.8% and the core reading at 6.0%. 22bp (88% prob of a quarter-point hike) is priced for the May meeting, with a full 50bp by August. A strong CPI print Wednesday would go a long way to cementing May hike expectations.
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