Cable regained strength after being deflated on Wednesday (down 1.2% for the day) by high inflation figure.
Investors turned focus towards the BoE, which is expected to raise rates by 25 basis points in the policy meeting next month that would bring the benchmark rate to 1.25%, in efforts to bring soaring inflation under control and ease strong pressure on households and the economy.
The Britain’s financial minister Sunak, who was criticized for not adequately helping the households during the current crisis, has backed the BoE, in joint efforts to ease the impact of crisis.
Fresh recovery managed to recover almost a half of Wednesday’s loss, but needs to extend above falling 20DMA (1.2446) and a double top of Tue/Wed (1.2500) to generate stronger bullish signal.
On the other side, renewed risk aversion weighs on sterling, along with negatively aligned daily studies, as bearish momentum started to rise.
Solid support at 1.2323 (10DMA) needs to hold to keep bulls alive, otherwise break here would weaken near-term structure and shift focus lower.
Res: 1.2512; 1.2534; 1.2600; 1.2622
Sup: 1.2323; 1.2286; 1.2236; 1.2200