• UK headline CPI matches consensus estimates.
• Softer core CPI print prompts some profit-taking.
• Goodish USD rebound adds to the downward pressure.
The GBP/USD pair retreated farther from post-Brexit highs and refreshed session lows following the release of UK inflation figures.
Currently trading around the 1.3770-65 region, the pair met with some supply after the UK consumer inflation, as measured by headline CPI matched consensus estimates and eased to 3.0% y-o-y rate during December.
Meanwhile, the core CPI (excluding the volatile food, energy, alcohol, and tobacco items) eased more than expected to 2.5% yearly rate and prompted some additional profit taking slide around the major, especially after the latest upsurge of over 350-pips since last Thursday.
Adding to this, a goodish pickup in the US Dollar demand further collaborated to the pair's steady retracement slide from levels beyond the 1.3800 handle, touched in the previous session.
Technical outlook
Mario Blascak, European Chief Analyst at FXStreet writes: “The immediate target remains at $1.3850, representing 61.8% retracement of the post-Brexit slump of GBP/USD from $1.5000 to $1.1950. The technical indicators on the daily chart look exhausted with Slow Stochastics and the Relative Strength index at Overbought territory, setting the stage for the technical correction lower.”
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