GBP/USD: Key Levels to Watch with UK Inflation Data in Focus

Summary:

GBP/USD has slowed down as investors await UK inflation data. The subtle rise in US bond yields has offered some support to the US dollar.

GBP/USD is trading lower after the US dollar managed to rise past the $91 mark in the previous session. However, the greenback is yet to find its footing amid the declining US treasury yields. On Wednesday, the benchmark 10-year bond yields were at 1.56, up by 0.22%. While this has offered some support to the US dollar, it is still close to the one-month low of 1.53. Subsequently, the dollar index has risen by 0.05% at 91.24.

Investors are now keen on the UK inflation data scheduled for release on Wednesday. Analysts expect a CPI reading of 0.8% YoY, which is higher than February’s 0.4%. A higher-than-expected number will be a bullish catalyst for GBP/USD.

GBPUSD Technical Outlook

The Sterling Pound has given up some of its previous gains against the US dollar after the latter currency rose subtly. Earlier on Tuesday, GBP/USD moved past the psychological 1.4000 for the first time since early March. However, as the greenback rose from 90.86 to 91.29, the pair fell to about 1.3925.

On Wednesday, the pair is down by 0.05 at 1.3928. Nonetheless, on a four-hour chart, it has remains above the 25 and 50-day exponential moving averages. In my opinion, GBP/USD will slow down and find support at 1.3915 as investors look for further cues from UK inflation data.

Depending on the outcome, the bulls may manage to get the price back up to 1.4000. At this psychological level, it will probably experience some resistance before moving higher towards its next target at 1.4100. On the flip side, a move below 1.3900 will have the bears targeting 1.3800.