GBP/USD sticks to modest gains above mid-1.2500s, moves little post-UK CPI

The GBP/USD pair held on to its mildly positive tone through the early European session on Wednesday and had a rather muted reaction to the latest UK macro data.

The pair built on the previous session's late rebound from the key 1.2500 psychological mark, or fresh multi-month lows, and gained some follow-through traction on Wednesday. The pair held steady around the 1.2570-80 region and moved little following the release of UK consumer inflation figures.

Data released this Wednesday showed that the headline UK CPI rose 0.3% in May as against 0.6% recorded in the previous month and the yearly rate eased to 2.0% from 2.1% previous. The readings were mostly in line with consensus estimates and hence, did little to provide any meaningful impetus.

The fact that Boris Johnson remains a leading candidate to be Britain's next Prime Minister and received 126 votes in the second round of Tory leadership contest on Tuesday, persistent fears of a no-deal Brexit held investors from placing any aggressive bets and might continue to keep a lid on any strong gains.

Investors also seemed reluctant ahead of Wednesday's key event risk - the highly anticipated FOMC monetary policy update, which might provide fresh clues over the central bank's near-term policy outlook and eventually drive the near-term sentiment surrounding the US Dollar.

Technical levels to watch