UK Inflation Comes in Hot, Boosts Sterling?

Inflation in the United Kingdom has risen more than expected, reinforcing views that the Bank of England (BoE) will deliver another rate hike sooner rather than later.
The year-on-year CPI change accelerated to 2.7% in August, up from 2.5% previously, whereas analysts had expected a marginal slowdown to 2.4%. The monthly change also surged and printed 0.7% from 0.0% in July.
Moreover, the core indicator, which is stripped of food, energy costs and alcohol, also improved markedly to 2.1% on the yearly basis from 1.9%, beating expectations of a 1.8% print.
Sterling was immediately bid after this news and jumped around 50 pips to stall around the 1.32 mark.
However, bulls failed to hold gains and investors took profits from the recent rally, which brought the cable back below 1.3150 in a sharp move. Now there is a big rising wedge pattern in play, which has the potential to push the Pound back below the 1.30.
Therefore, technical trading may occur in the following days and the next support is now around 1.3130. If broken, further depreciation to 1.31 and possibly lower might happen quickly.

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