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Bears stretch out into fourth successive day and test through significant support at 1.2026 (50% of 1.1760/1.2293 upleg / daily Kijun-sen), pressuring psychological 1.20 support.
Technical structure on day to day graph is negative (MA’s in negative arrangement/14-d energy expanding lower an in bad area), supporting situation of break underneath vital 1.20 zone that would finish a twofold top example on day to day outline (1.2293/76) and signal an end remedial stage from 1.1760 (July 14 low, the most reduced since March 2020).
Bears are supposed to stay in play as long as the activity stays beneath urgent 1.21 opposition zone (broken Fibo 38.2%/20DMA).
Data released today show that UK labor market shows more signs of cooling, while investors shift focus to UK inflation data, due to be released tomorrow.
According to forecasts, July consumer prices are expected to hit new multi-decade high at 9.8% that raises probability for a second consecutive 0.5% rate hike by BOE, in attempts to battle soaring inflation, which the central bank expects to exceed 13% in October.
Despite expectations that higher interest rates would inflate pound, the currency may fail to benefit as higher borrowing cost is likely to hurt economic growth.
Res: 1.2060; 1.2089; 1.2106; 1.2148.
Sup: 1.2026; 1.2000; 1.1963; 1.1916.
