The US dollar tumbled after a slowdown in core inflation in July. A bullish MA cross on the daily chart suggests an improvement in sentiment but the pound needs to consolidate its gains so a rebound could have solid foundations. The pair previously met stiff selling pressure at the daily resistance 1.2300. A bullish breakout would be a decisive moment as it would trigger a runaway rally to May’s high at 1.2660. 1.2130 at the base of the breakout is a key support and the psychological level of 1.2000 a critical floor.
