GBP/USD bounces-off a dip to 1.3250, focus shifts to US CPI

The GBP/USD pair took out 1.33 handle last hours, but failed to sustain above the last after the bears fought back control and knocked-off the rate back to test 1.3250 levels.

GBP/USD: 1.3300 back on sight?

The spot witnessed a 75-pips sell-off in the early European trades, following the comments from the EU Commission Head Juncker on the Brexit issue, which weighed heavily on the pound. EU’s Juncker: Brexit process will take longer than UK thinks

The above comments poured cold water on the renewed optimism seen over the Brexit talks, after the EU's chief Brexit negotiator, Michel Barnier, noted yesterday that he could offer the UK a 2-year transition stay in the EU  market.

However, Cable managed to find fresh buyers near the midpoint of 1.32 handle, now attempting a tepid recovery back near 1.3265 levels, as the US dollar remains broadly subdued in anticipation of the key US CPI report, which is likely to determine the Fed’s next policy move and in turn set the tone for the dollar in the coming months.   

GBP/USD Technical View

Valeria Bednarik, Chief Analyst at FXStreet noted: “The 4 hours chart shows that the price is also developing above a bullish 20 SMA that aims to surpass a horizontal 200 EMA, both around 1.3215. In the same chart, technical indicators have lost their upward strength, but hold within positive territory, also indicating limited downward potential. The upside will be open if US data comes worst-than-expected, with scope then to extend its advance up to the 1.3380/1.3400 region.”