Cable breaks through key 1.30 support level following US inflation data

Cable dropped sharply after Wednesday’s US inflation data, reaching its lowest point in three weeks and breaching the key psychological support level at 1.30.

While the inflation data broadly met expectations, core CPI data indicated persistent inflation, which dampened prospects for a 50 basis point rate cut by the Fed and bolstered the US dollar.

The technical outlook on the daily chart is deteriorating, with the 14-day momentum turning negative and the price falling below the converging 10-day and 230-day moving averages, which are nearing a bear cross.

Additionally, the formation of a bearish failure swing pattern on the daily chart reinforces the negative signals. A decisive break below the 1.30 level could lead to further declines, with potential targets at 1.2965 (50% retracement of 1.2664/1.3266) and 1.2922/1.2894 (55-day moving average / Fibo 61.8%).

In the near term, the bias is expected to remain downward as long as the price stays below the 1.3100 zone (20-day moving average / today’s high).

Res: 1.3049; 1.3094; 1.3111; 1.3124
Sup: 1.3000; 1.2965; 1.2922; 1.2894