As we approach tomorrow's release of CPI data for both GBP and EUR, it's likely that the markets will adopt a wait-and-see approach until then.
Considering the longer-term perspective, GBP appears to be oversold within a bearish channel. As such, it's advisable to avoid short-term trades with high risk exposure.
Keep an eye on the yellow trend line, as a break above it could present opportunities for long trades.
Trading Scenarios: The UK CPI is estimated to be around 3.1%. Any bullish surprise, particularly between 3.2% to 3.3%, may offer a favorable zone around 1.2482 for shorting the pair. However, a figure exceeding 3.5% could signal a potential change in trend, prompting us to seek technical reasons to long the pair.
Conversely, any bearish surprise has the potential to breach key levels and invalidate the bearish channel. In such a scenario, I'll promptly announce new scenarios.
In the absence of any surprises, it's prudent to explore zones closer to the current price for shorting opportunities.
Stay informed and remain adaptable to evolving market conditions.
Best regards,
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We have CPI news in around 30 minutes, Take that under observation.