GBP/USD retreats from 1.2700 as investors brace for the US CPI release

Guillermo Alcala FXStreet

Sterling’s recovery falters at the 1.6680-1.6700 resistance area.
An increasing risk aversion ahead of the US CPI release is supporting the USD.
The broader trend remains negative while below 1.6680

The Pound has found some supply at levels right above the 1.2700 area before pulling back with investors cutting back short USD positions ahead of the US inflation release. The pair, however, remains moderately positive for the second consecutive day.

US CPI to set the Dollar’s near-term direction

All eyes are on the US Consumer Prices Index data, due on Wednesday, which is expected to confirm that price pressures remain steady well above the Fed’s target rate.

The USD risk is skewed to the upside, as recent US data has endorsed a “no landing” scenario, that would be confirmed in case of another upside surprise on inflation. Recent hints on wage growth and industrial prices are pointing to resilient inflation.

The technical picture shows the Pound under an increasing momentum, although the failure to confirm above the 1.6680-1.6700 area leaves the broader bearish trend intact. On the downside, supports are 1.6575 and 1.6535.

GBP/USD

Overview
Today last price	1.2668
Today Daily Change	0.0013
Today Daily Change %	0.10
Today daily open	1.2655

Trends
Daily SMA20	1.2673
Daily SMA50	1.2666
Daily SMA100	1.2668
Daily SMA200	1.2588

Levels
Previous Daily High	1.2664
Previous Daily Low	1.2614
Previous Weekly High	1.2684
Previous Weekly Low	1.2539
Previous Monthly High	1.2894
Previous Monthly Low	1.2575
Daily Fibonacci 38.2%	1.2645
Daily Fibonacci 61.8%	1.2633
Daily Pivot Point S1	1.2624
Daily Pivot Point S2	1.2594
Daily Pivot Point S3	1.2574
Daily Pivot Point R1	1.2675
Daily Pivot Point R2	1.2695
Daily Pivot Point R3	1.2725

Author

Guillermo Alcala

FXStreet

Graduated in Communication Sciences at the Universidad del Pais Vasco and Universiteit van Amsterdam, Guillermo has been working as financial news editor and copywriter in diverse Forex-related firms, like FXStreet and Kantox.

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