Dollar Drift Waits on CPI; Cable Holds Above Resistance

Cable is a different story. Sterling broke above a resistance barrier from last week – the 1.2800 handle – and is grinding higher. The U.K. rates story remains supportive, with the Bank of England on hold while the Fed is seen cutting. A trader in London said they are buying dips in GBP/USD, calling it one of the few pairs where they are comfortable holding a long against the dollar.

Of course, the CPI release reshuffles the deck. A hot print would reinforce the case for the Fed to hold rates higher for longer, sending the dollar broadly higher and testing the support levels in cable and USD/CHF. A soft number would revive bets on a September cut, hurting the dollar and pushing cable toward 1.2900, traders said.

Chris is a proprietary trader with more than 20 years of experience across various markets, including currencies, indices and commodities. As a senior analyst at FXEmpire since the website's early days, he offers readers advanced market perspectives to navigate today's financial landscape with confidence.