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Cable rises to session highs ahead of inflation report as dollar slips further

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GBP/USD moves to a high of 1.3176


The dollar and the yen are once again being beaten down as market sentiment continues to trade more positively. 10-year Treasury yields are up to session highs on the day at 3.053% currently and that is resulting in the yen slipping and the dollar is also seeing a similar move lower at the moment across the major bloc.
As for GBP/USD, near-term price momentum continues to trade more bullish as price remains above the 100-hour MA (red line) in trading but there is some minor resistance around the 1.3175 level seen since yesterday.
This comes as the pair is currently testing daily resistance in the form of the 100-day MA:

Much like the EUR/USD, a move back above the 100-day MA (red line) would put an end to the bearish momentum seen in the pair since April. And that is a key level to break above on the daily chart for buyers.
The next key risk event to come is the UK inflation report at 0830 GMT. I don’t expect the report to generate much of a buzz in the pound as Brexit talks continue to dominate the landscape, but with key technical levels in question it could be enough of a catalyst for buyers to attempt to make a run with it if the data is more positive.
However, as mentioned, the major risk remains that of Brexit and UK PM May will be in Salzburg to meet with European leaders today. Although there won’t be much formal progress from talks there, right now bias seems to be leaning towards a softening of stance by the EU on the Irish border.
Should that be the headline conclusion from talks this week, I would expect the pound to pick up further momentum from here. But note, it’s all about the 100-day MA break now.

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