The pound has been riding the wave of risk appetite higher against the dollar today. On the economic front, the data coming out of the UK was mostly positive.
The British Consumer Price Index (CPI) was right in line with expectations at 3.2% and the Core CPI reading surprisingly jumped to 3.1%. That additional risk appetite created by the strong Greek debt auction results, and a positive start to the US corporate earnings season, was enough to push the pound almost 200 pips higher against the greenback. As we head into the mid-morning portion of the US trading day though, we are seeing some of the early momentum in both equities and currencies slow down a bit as traders await more earnings reports. It is too early to tell if this is simply a brief pause or if profit-taking activities will start to take a toll on the recent rise of the pound, as investors and traders still remain skittish and prefer to lock in profits when they are available. On the technical side, resistance to a further move up may come in around 1.5170 with a level beyond at the July highs in the zone of 1.5230 to 1.5240. Support for this pair seems solid around 1.4950 to 1.4960, but a break lower could easily test the 1.4860 level.