GBP/USD hovers around 23.6% Fibo ahead of UK CPI data

Having snapped three-day losing streak on Monday, the GBP/USD pair is trading in the sideways manner above 1.3315 (23.6% of 1.5019-1.2789) ahead of the UK August CPI release.

Inflation seen rising in August

Cost of living as represented by the consumer price index (CPI) is seen rising 0.7% y/y in Aug compared to July figure of 0.6%. Month-on-month the headline number is seen rising 0.4% compared to the 0.1% drop seen in July.

The uptick in the inflation should not come as a surprise, given the rise in imported inflation via weak Pound and strong oil prices. Apart from the data, the focus would also be on the gilt yields and US treasury yields.

GBP/USD Technical Levels

Having breached 23.6% Fibo resistance yesterday, the spot appears poised to test 1.3371 (Aug 3 high), above which a major hurdle is seen at 1.3445 (Sep 6 high). On the other hand, a breakdown of support at 1.3315 (23.6% of 1.5019-1.2789) would open doors for a re-test of 1.3235 (previous day’s low) – 1.32 (zero figure) levels.