The GBPUSD pair is currently consolidating between two critical levels ahead of the US CPI report. The USD has faced pressure recently, with weaker data and a stock market selloff leading to expectations of rate cuts.
The upcoming US CPI report is anticipated to affect the US Dollar. A soft report could weaken the dollar, while a strong report might provide a temporary boost. However, falling long-term Treasury yields could still lead to dollar depreciation.
Technical Outlook
GBPUSD’s daily chart reveals it is situated between key levels, with support around 1.28 and potential selling pressure below that. The 4-hour chart shows consolidation before the CPI release, with sellers likely to enter around 1.3046.
The 1-hour chart indicates rangebound activity, suggesting caution until the CPI report is out. Key upcoming data includes the US PPI and Jobless Claims, followed by the UK GDP and Consumer Sentiment report.
What has been outlined so far establishes a period of hesitation in the GBPUSD pair, with price action restricted by defined technical boundaries. The hesitation is largely due to anticipation ahead of the US inflation data, which could sway expectations regarding interest rate adjustments. The pressure on the dollar comes from weaker economic figures combined with a stock market retreat, reinforcing speculation that monetary easing may arrive sooner than previously thought.
The inflation figures set to be released shortly could trigger movement. If inflation is reported lower than projected, this would likely add to the case for rate reductions, further weighing on the dollar. Conversely, if the data indicates persistent pricing pressures, a temporary bounce in the currency may follow. Even in that scenario, falling long-term Treasury yields raise questions about how sustainable any recovery in the dollar might be.
From a technical perspective, price remains boxed in between clear support and resistance. The daily timeframe points to a support zone near 1.28, an area where buyers have previously shown interest, while the top side remains vulnerable to pressure. On the lower timeframes, compression before the inflation report suggests hesitation among market participants. The 4-hour chart highlights where sellers may start re-entering if prices attempt to push higher, with the 1.3046 region standing out in that regard.
Market Sentiment
Shorter timeframes, such as the hourly view, suggest traders are unwilling to take strong positions ahead of new information. With price activity remaining restricted, waiting for fresh momentum to emerge could prevent unnecessary exposure. Upcoming releases beyond inflation also warrant attention, with the Producer Price Index and Jobless Claims on the way, providing further insight into economic conditions. The UK’s own data releases, including GDP figures and consumer sentiment readings, could add another layer of movement, particularly if they diverge from expectations.
For now, hesitation in price action reflects the way markets are positioning ahead of critical releases. Within tightly defined levels, patience remains key until a clearer direction emerges.
