GBP/USD Forecast: bearish channel still in play ahead of UK CPI/FOMC

The GBP/USD pair had good two-way moves within a short-term descending trend-channel formation on the 1-hourly chart and finally ended the day with some modest losses. The pair initially gained some positive traction on the back of an unexpected drop in UK claimant count change and in line unemployment rate, which helped offset a slightly weaker average weekly earnings data. The up-move quickly ran out of steam amid a goodish pickup in the US Dollar demand after data released from the US showed headline CPI accelerated at the fastest rate since 2012. 

Later in the day, the British Pound caught some strong bids, with the pair rallying around 50-pips after the UK Prime Minister Theresa May avoided a defeat in a key Brexit vote. The pair spiked back above the 1.3400 handle and retested the descending trend-channel resistance, albeit failed to sustain at higher levels and dropped back to mid-1.3300s during the Asian session on Wednesday.

Moving ahead, today's release of UK consumer inflation figures will now be looked upon for some fresh trading impetus during the European session. The key focus, however, would be on the highly anticipated FOMC decision, where the US central bank is widely expected to raise interest rates and also release its updated economic projections. 

Looking at the technical picture, this week's break below an ascending trend-channel and subsequent downslide alongside short-term descending channel clearly point to additional near-term weakness. The bearish bias would be confirmed once the pair breaks through the descending channel support, currently near the 1.3320-15 region. Below the mentioned support, the pair is likely to slide below the 1.3300 handle and head towards testing its next support near the 1.3240 region, closer to YTD lows set on May 29th. 

On the upside, any meaningful momentum back above the 1.3400 handle might continue to confront some fresh supply near the 1.3430 region, which if cleared decisively might negate the negative outlook and trigger a short-covering rally towards 1.3455-60 intermediate resistance en-route the key 1.3500 psychological mark.