GBP/USD Forecast: could drop back to sub-1.31 level, UK jobs data awaited

The GBP/USD pair failed to benefit from Tuesday's inflation reading, which showed that the headline CPI climbed to 3.0% y-o-y in September. The rise in inflation supported investor expectations that the Bank of England might raise interest rate at its Nov. 2 meeting, but failed to provide any fresh bullish impetus to the British Pound. The BoE Governor Mark Carney's testimony before the Treasury Select Committee was interpreted as broadly dovish, which coupled with persistent US Dollar buying interest weighed heavily on the pair through Tuesday's trading session.

On Wednesday, the pair held weaker below the 1.3200 handle as investors now look forward to the UK labor market report for some fresh impetus. With inflation at 5-1/2 year highs and firming expectations for a possible November BoE rate hike move, today's data is unlikely to be a major game changer, tough should drive some volatility across GBP crosses. 

Currently placed near the 23.6% Fibonacci retracement level of 1.3452-1.3027 downfall, a weaker jobs report has the potential to extend the slide towards the 1.3120 intermediate support before the pair eventually breaks below the 1.3100 handle and head towards testing 1.3065 strong horizontal support. 

On the flip side, momentum above the 1.3200 mark now seems to confront resistance near the 1.3225 region, which if cleared could lift the pair beyond 1.3265 area (38.2% Fibonacci retracement level) towards reclaiming the 1.3300 handle.