GBP/USD drops back towards 1.2400, soft UK CPI weighs

The GBP/USD pair reverses a knee-jerk spike to daily highs reached at 1.2445 levels, and hovers within a striking distance of 1.24 handle, in the wake of a delayed reaction to disappointing core CPI figures released out the UK economy.

The spot wiped-out gains after the bulls ran into resistances located just shy of 1.2450 barrier, despite broad based US dollar weakness. However, cable manages to hold above 1.24 handle as weaker treasury yields continue to underpin the demand for sterling as an alternative higher-yielding currency.

Moreover, a minor-recovery in GBP/JPY amid resurgence of Yen sellers, also helps cushion the downside in the major. Markets now await the US JOLTS job openings data and FOMC member Kashkari’s speech for fresh incentives on the prices.

GBP/USD Levels to consider            

Slobodan Drvenica Windsor Brokers Ltd notes, “Mixed studies suggest no clear direction, as the pair is stuck between 30 and 10SMA's. Support at 1.2360 also marks 50% retracement of 1.2107/1.2613 upleg and guards another pivotal support at 1.2345 (daily cloud base). Res: 1.2430; 1.2458; 1.2500; 1.2553 Sup: 1.2401; 1.2360; 1.2345; 1.2300.”