The GBP/USD pair maintained its bearish bias below 1.2300 handle, albeit had a muted reaction to in-line with estimate US CPI print.

According to the data released just a short while ago, US headline CPI moved above 2.0% for the first time since July 2014 and came-in at 2.1% y-o-y for December, bang in-line with consensus estimates. Meanwhile, the core rate (excluding food & energy) ticked higher to 2.2% y-o-y as compared to previous month’s 2.1%.

Upbeat US CPI reading failed to provide a follow through boost but helped the US Dollar to hold recovery gains following previous session’s slump in wake of Trump’s comments.

Next on tap would be the US industrial production and capacity utilization data for December, which would help investors to gauge the strength of the US manufacturing sector and provide some short-term trading opportunities. This would be followed by various Fedspeaks, including the Fed Chair Janet Yellen's speech later during NY trading session.

Technical outlook

Valeria Bednarik, Chief Analyst at FXStreet notes, “the 4 hours chart shows that the positive tone persists despite the pair eased over 100 pips so far today, given that the price is holding around a horizontal 200 EMA whilst holding above a bullish 20 SMA. Technical indicators in the mentioned time frame hold near overbought readings, trying to resume their advances, but still unable to confirm further gains.”

She further writes, “Further slides below 1.2290 show lead to a continued decline towards the 1.2250 region first, en route to 1.2210, whilst above 1.2360 the pair will likely retest the mentioned weekly high at 1.2415.”

1 Week
1 Month
1 Quarter

1 Week

Avg Forecast 1.2170

36% Bullish
43% Bearish
21% Sideways

Bias Bearish

1 Month

Avg Forecast 1.2115

25% Bullish
50% Bearish
25% Sideways

Bias Bearish

1 Quarter

Avg Forecast 1.2081

30% Bullish
35% Bearish
35% Sideways

Bias Bearish

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