GBP/USD seems vulnerable near 1.3000 mark, US CPI eyed for fresh impetus

The GBP/USD pair remained depressed through the early European session, with bears still awaiting sustained weakness below the 1.3000 psychological mark.

Following the previous day's two-way/directionless price move, the GBP/USD pair met with a fresh supply on Tuesday and edged back closer to the YTD low touched last week. Traders seemed rather unimpressed by mostly upbeat UK employment details, instead took cues from sustained US dollar buying interest.

The UK Office for National Statistics (ONS) reported that the ILO Unemployment Rate unexpectedly fell to 3.8% in three months to February from the 3.9% previous. Additional details revealed that Average Earnings Including Bonus rose by 5.4% and the number of people claiming benefits still fell by 46,900 in February.

The data, however, failed to provide any impetus to the British pound and was largely overshadowed by the underlying bullish sentiment surrounding the USD. The prospects for a more aggressive tightening by the Fed, along with inflation fears, pushed the US bond yields to a fresh multi-year peak and underpinned the buck.

Hence, the market focus will remain glued to the latest US consumer inflation figures, due for release later during the early North American session. In the meantime, concerns that the war in Ukraine and tough new COVID-19 restrictions in China could hit global growth should underpin the safe-haven USD and cap the GBP/USD pair.

Technical levels to watch