Despite the broad US Dollar weakness favoring the Pound higher, traders remain cautious ahead of the UK CPI data release as the lockdown period has been disappointing for Britain. As a result, below-forecast inflation can weigh on the pair’s recent recovery. The closer it falls to zero, the greater the chances of the BOE slashing rates to negative territory, and the greater the potential slide for the Cable. From a technical perspective, the short-term bias remains bearish as long as price remains below the 50-period SMA. A break above that level, will likely trigger further gains towards the 200-period SMA.
Support: 1.2175 / 1.2075
Resistance: 1.2270 / 1.2310
