GBP/USD attempts a recovery, still weak at 1.4170

The GBP/USD pair found fresh bids around 1.4110-15 support area and is now attempting a recovery to currently trade at 1.4170.

Earlier during the European trading session, the major had a muted reaction to lower-than-expected UK CPI print for the month of May. UK May CPI remained unchanged at 0.3% y-o-y, falling short of expected 0.4% y-o-y print, while core CPI also came in unchanged, at 1.2% y-o-y. 

Apart from the weak CPI, UK-EU referendum on June 23, popularly termed as 'Brexit', remains key fundamental overhang for sterling traders. An exit vote is likely to trigger a sharp drop for the British Pound, while a ‘remain’ majority could only turn-out to be a sentimental booster. Hence, traders might be reluctant to hold any bullish bets and might restrict any swift recovery for the pair.

In the meantime, traders now turn their focus on the release of monthly US retail sales figure, due later during NA session, ahead of UK employment data and the much awaited FOMC meeting outcome on Wednesday. 

Technical outlook

Valeria Bednarik, Chief Analyst at FXStreet notes, "the GBP/USD pair  4 hours chart shows that the technical indicators have resumed their declines after recovering from extreme oversold readings, whilst the 20 SMA has accelerated its bearish slope and stands now around 1.4290. The risk of wild moves either side of the board increases daily basis as the referendum looms, which means extreme cautious is recommended."

"Nevertheless, a break below 1.1410 should see the pair falling down to 1.4070 first, whilst below this last, it can extend its decline down to 1.4000/30. The 1.4180 level is the immediate resistance, followed by 1.4220 and 1.4250, with approaches to this last probably attracting selling interest. "