GBP/USD holds steady around latest lows, awaits UK CPI for fresh direction

GBP/USD struggles to justify downside pressure amid political uncertainty as traders await inflation data for fresh impulse.
The US Dollar (USD) seesaws due to the shift in market sentiment.

Anil Panchal FXStreet

GBP/USD registers stray moves ahead of the UK’s July month CPI data while trading near 1.2560 before the London market opens on Wednesday.

The pair came under pressure during the early Asian session after the news broke that rebel members of the Parliaments (MPs) have lined up with ex-Chancellor Phillip Hammond to convey that Boris Johnson is the reason the EU is not availing any deals to the UK. Some among them, like the Speak of the House of Commons, John Bercow, took a step forward pledged to do anything to stop Britain crash out of the bloc without any deal.

The pair couldn’t benefit much from the previous day’s data for Average Earnings and Claimant Count Change as Unemployment Rate rose unexpectedly. Also exerting the downside pressure could be the US Dollar (USD) strength against the British Pound (GBP) after the US President Donald Trump conveyed some good news for China’s trade fraternity.

It should also be noted that the USD trimmed previous gains after traders focused back to Hong Kong’s protests and China’s sluggish activity data.

Looking forward, July month CPI from Britain will be the key for the Cable traders to watch as the Bank of England (BOE) has recently turned more data-dependant. The headline inflation number is likely to soften from 2.0% to 1.9% on a yearly format whereas Core CPI (YoY) is likely to remain unchanged at 1.8% with MoM figures expected to weaken to -0.1% form 0.0% prior. The numbers for the Retail Price Index and the Producer Price Index could also entertain traders.

Technical Analysis

While pair’s downside beneath two-day long support-line, at 1.2055, can trigger fresh declines to 1.2015 and 1.2000 round-figure, Thursday’s low near 1.2095 acts as an immediate resistance to aim for 1.2155.

1. R3 1.2149
2. R2 1.2123
3. R1 1.2092
PP 1.2067
1. S1 1.2036
2. S2 1.201
3. S3 1.1979

Author

Anil Panchal

FXStreet

Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.

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