GBP/USD consolidates in a range around 1.2700 mark, eyes UK CPI for fresh impetus

GBP/USD remains confined in a narrow range on Wednesday ahead of the UK CPI.
Tuesday’s softer US Retail Sales undermine the USD and lend support to the major.
The subdued price action warrants caution before positioning for meaningful gains.

Haresh Menghani FXStreet

The GBP/USD pair struggles to gain any meaningful traction on Wednesday and oscillates in a narrow trading band, around the 1.2700 round-figure mark during the Asian session. Spot prices, meanwhile, hold above a one-month low touched last Friday as traders keenly await the release of the latest UK consumer inflation figures before positioning for the next leg of a directional move.

The headline UK CPI is expected to tick higher and come in at 0.4% in May versus the previous print of 0.3%, while the yearly rate is seen decelerating to 3.5% from 3.9% in April. The data will play a key role in influencing the British Pound (GBP) and provide some impetus to the GBP/USD pair. The market attention will then turn to the Bank of England (BoE) monetary policy meeting on Thursday, which will help determine the near-term trajectory for the currency pair.

Heading into the key data/central bank event risks, subdued US Dollar (USD) price action turns out to be a key factor acting as a tailwind for the GBP/USD pair. The softer-than-expected US Retail Sales report released on Tuesday pointed to signs of exhaustion among consumers and reaffirmed bets that the Federal Reserve (Fed) might start cutting interest rates in September. This led to the overnight decline in the US Treasury bond yields and is seen undermining the buck.

The aforementioned fundamental backdrop supports prospects for some meaningful appreciating move for the GBP/USD pair. That said, the lack of any follow-through buying warrants some caution before positioning for an extension of the recent bounce from the vicinity of mid-1.2600s, or a one-month low touched last Friday.

GBP/USD

Overview
Today last price	1.2704
Today Daily Change	-0.0005
Today Daily Change %	-0.04
Today daily open	1.2709

Trends
Daily SMA20	1.2743
Daily SMA50	1.2614
Daily SMA100	1.264
Daily SMA200	1.2553

Levels
Previous Daily High	1.2721
Previous Daily Low	1.2669
Previous Weekly High	1.286
Previous Weekly Low	1.2657
Previous Monthly High	1.2801
Previous Monthly Low	1.2446
Daily Fibonacci 38.2%	1.2701
Daily Fibonacci 61.8%	1.2689
Daily Pivot Point S1	1.2679
Daily Pivot Point S2	1.2648
Daily Pivot Point S3	1.2627
Daily Pivot Point R1	1.273
Daily Pivot Point R2	1.2752
Daily Pivot Point R3	1.2782

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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