The Sterling closed the previous trading session by gaining 56 pips against the US Dollar. The rate’s failure to reach the bottom channel line on Friday and its subsequent surge was eventually followed by a breakout of the prevailing two-week channel down and the 55– and 100-hour SMAs near 1.3870.
The pair is currently trading in a short-term channel up. Its southern barrier is supported by the aforementioned SMAs, while the northern side—by the 200-hour SMA and the 38.20% Fibo retracement. This channel is likely to be respected during the first part of the day and maybe even further if the US CPI data do not introduce extensive volatility in the market.
The ultimate daily high should be the monthly PP at 1.40, while the nearest support is the distant weekly and monthly S1s at the 1.37 mark.