GBP/USD dives to 1.3800 mark, fresh session lows on hotter-than-expected US CPI

A combination of factors prompted some fresh selling around GBP/USD on Tuesday.
COVID-19 jitters, Brexit woes continued acting as a headwind for the British pound.
Upbeat US CPI report pushed the USD higher and added to the intraday selling bias.

Haresh Menghani FXStreet

The GBP/USD pair dived to fresh daily lows in reaction to hotter-than-expected US consumer inflation figures, with bearish now eyeing sustained weakness below the 1.3800 mark.

Having struggled to find acceptance above the 1.3900 mark, the GBP/USD pair came under some renewed selling pressure on Tuesday and was weighed down by a combination of factors. The disappointing data released by the British Retail Consortium (BRC), along with COVID-19 and Brexit woes turned out to be key factors that acted as a headwind for the British pound. This, along with a goodish pickup in the US dollar demand, contributed to the pair's intraday decline.

The intraday USD buying picked up pace during the early North American session following the release of the latest US consumer inflation figures. In fact, the headline CPI smashed market expectations and accelerated to 5.4% YoY in June. Data published by the US Bureau of Labor Statistics further revealed that CPI at the core level jumped 4.5% YoY during the reported month.

The June FOMC meeting minutes released last Wednesday revealed that Fed officials agreed on the need to be ready to act if inflation or other risks materialize. The latest CPI report further fueled market speculations that the Fed is moving towards tightening its monetary policy stance sooner than anticipated and provided an additional boost to the already stronger USD.

With the latest leg down, the GBP/USD pair has reversed a major part of its gains recorded last Friday. Some follow-through selling below the 1.3800 mark will be seen as a fresh trigger for bearish traders and set the stage for additional intraday losses.

Technical levels to watch

GBP/USD

Overview
Today last price	1.3855
Today Daily Change	-0.0032
Today Daily Change %	-0.23
Today daily open	1.3887

Trends
Daily SMA20	1.3881
Daily SMA50	1.402
Daily SMA100	1.3944
Daily SMA200	1.3678

Levels
Previous Daily High	1.391
Previous Daily Low	1.3839
Previous Weekly High	1.3908
Previous Weekly Low	1.3742
Previous Monthly High	1.4249
Previous Monthly Low	1.3787
Daily Fibonacci 38.2%	1.3866
Daily Fibonacci 61.8%	1.3883
Daily Pivot Point S1	1.3847
Daily Pivot Point S2	1.3808
Daily Pivot Point S3	1.3776
Daily Pivot Point R1	1.3918
Daily Pivot Point R2	1.3949
Daily Pivot Point R3	1.3989

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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