GBP/USD trims gains, back near 1.2950 ahead of US CPI

The GBP/USD pair finally broke higher from the consolidative-mode and advanced further to hit fresh weekly tops of 1.2966, before easing slightly to now trade near 1.2950 levels.

GBP/USD awaits US inflation for fresh direction

The offered tone around the US dollar weakened in the European session, prompting a minor-retreat in the GBP/USD pair. Markets are seen taking profits off the table from their USD shorts ahead of the big risk event – US CPI report, which is likely to provide fresh direction on the Fed’s interest rate outlook for the coming months.

Moreover, weaker oil prices combined with cautious tone seen around the European equities, also collaborate to the renewed downside in the major.

From a broader perspective, however, Cable looks to extend gains to regain 1.30 handle, in the wake of the recent hawkish twist delivered by the BOE policymakers.

Calendar-wise, in absence of macro data from the UK docket, attention turns towards the US economic releases, with the US CPI, retail sales, industrial production and UoM consumer sentiment data eagerly awaited.

GBP/USD levels to consider             

Jim Langlands at FX Charts noted, “The short term momentum indicators are still pretty much neutral, as are the dailies, so there are better things to watch, but on the downside, back below minor support near 1.2850 could retest the stronger 1.2810 area. A break of 1.2790 could have us quickly back at 1.2750 although this seems unlikely today. On the topside, good sellers will be seen between 1.2980 and 1.3030 ahead of the descending trend resistance at 1.3040 and the trend high of 1.3047.”