GBP/USD off highs, returns below 1.3900

Cable eased from tops near 1.3930.
UK’s CPI rose more than expected 3.0% YoY in Jan.
US CPI next of relevance on Wednesday.

Pablo Piovano FXStreet

The Sterling is losing part of its shine today, prompting GBP/USD to deflate from the 1.3930 area, or daily tops, to the current 1.3890/80 band.

GBP/USD clings to daily gains on USD-selling

After climbing to session tops near 1.3930 in the wake of UK’s inflation figures, Cable met some selling pressure and it has now receded to the sub-1.3900 region, albeit still well into the positive territory.

It is worth recalling that UK’s consumer prices contracted less than expected 0.5% MoM during last month, while they rose at an annualized 3.0%. Core CPI rose 2.7% over the last twelve months, also beating expectations.

Despite Cable remains well supported by the prevailing USD-selling bias, further gains should face quite a moderate hurdle around post-BoE tops in the 1.4070 region.

Ahead in the week, US CPI and retail sales for the month of January should drive investors’ sentiment tomorrow, while UK’s retail sales will be the next risk event for GBP, expected on Friday.

GBP/USD levels to consider

As of writing, the pair is gaining 0.31% at 1.3882 facing the next hurdle at 1.3924 (high Feb.13) seconded by 1.3984 (10-day sma) and finally 1.4067 (high Feb.8). On the downside, a breach of 1.3765 (low Feb.9) would aim for 1.3669 (55-day sma) and then 1.3457 (2018 low Jan.11).

Author

Pablo Piovano

FXStreet

Born and bred in Argentina, Pablo has been carrying on with his passion for FX markets and trading since his first college years.

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