The forex pair is moving sideways ahead of the US CPI data. Any sign of inflation persistence in the US could strengthen the dollar

Taking a look at the pound vs dollar forex pair ahead of the US CPI data due later today (13:30 GMT). Currently, cable is trading at around £1.2568, and when we apply the Bollinger Bands we can see that it has now dipped below the middle moving average. In theory, this is a bearish indication with the possibility of the forex pair dipping further towards the lower band of the Bollingers. The lower band currently reads £1.2463, the lower band is acting as the key support here. Initial support sits at £1.2502, which is Friday’s low. However, even though the pair has dipped below the middle moving average, with the inflation data coming up, we could see a move back up and above. This will be dependent on the outcome of the data. The first resistance for the pound here is the middle MA, reading £1.2598, followed by this is the level of £1.2613. A break above £1.2613 may see an extension back up to £1.27 as we head into the end of the month and year. The technical indicators are not providing any hints right now for either the bulls or bears as they are mixed. The MACD is negative, whereas the RSI is neutral but almost positive with a reading of 54.