GBPUSD: Cable heavy ahead of CPI. BOE Minutes tomorrow by Jim Langlands

After reaching up to 1.5737 amidst some early cutting of long dollar positions, Sterling then turned to head sharply lower in reaching a session low of 1.5619. The slide was on the back of some broad based buying of dollars but Cable was not helped by further dovish comments on inflation from a couple of BOE board members and it was further undermined by the fact that HSBC put out a comment that it now does not think there will be any rate hike until Q1 2016.I suspect we are in for some more choppy consolidation above the recent trend low of 1.5593 today, which would allow further unwinding of the oversold condition of the 4 hour charts. If Cable does come under further pressure though, – which may well happen if the CPI comes in below expectations (exp 1.3%yy; Core,1.6%), – look for a run, below 1.5590 towards 1.5550 and then to 1.5500. There really is not too much support to be seen though until we approach 1.5400, which may come about if the BOE Minutes, due tomorrow, are overly dovish.

A return to the topside would see sellers at 1.5660 (minor) ahead of 1.5700. Above here would see a run back to the session high and possibly to 1.5750 (100 HMA). I don’t really see it up here today, but if wrong look for further gains towards 1.5800 and then to the 200 HMA at 1.5815.

Economic data highlights will include:

UK CPI, PPI, RPI.

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