GBP/USD on the offers below 1.3100, focus shifts to UK CPI

The GBP/USD pair stalled its bullish run above 1.3100 levels, and now embarks upon a corrective slide sub 1.31 handle, as the European trading gets underway.

GBP/USD trades above all major DMAs

The recovery in the US dollar against main competitors from ten-month lows regains momentum in early Europe, pushing the GBP/USD pair deeper in the red zone to print daily lows of 1.3089 levels.

The greenback slumped sharply across the board on Friday, after the US data dump came in downbeat across all indicators, especially a miss in the highly-influential CPI figures weighed down on the Fed rate hike prospects this year. The USD index now trades at 95 handle, recovering from 94.86 levels.

However, further gains appear limited, as the bulls face exhaustion and await Tuesday’s UK CPI data for the next push higher. Meanwhile, the recent comments from the BOE policymakers, citing reluctance on rate rises, could also keep the GBP on the back foot.  

Later today, the major awaits the sentiment on the European markets for fresh impetus, while the USD dynamics will also continue to have a significant impact on the prices.

GBP/USD levels to consider             

Haresh Menghani, Analyst at FXStreet noted, “With short-term technical indicators still away from near-term overbought conditions, the pair seems more likely to extend the upward trajectory towards 1.3170 resistance area marking 61.8% Fibonacci expansion of 1.2109-1.3048 up-swing and subsequent retracement. Meanwhile, any profit taking slide might now be looked upon as buying opportunity and hence, is likely to be limited near a previous strong resistance, now turned support near the 1.3050-30 region.”

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