GBP/USD Trades Near 3-Week Low Ahead of US CPI Data
The GBP/USD pair is trading close to 1.3430, which is near its lowest level in the last three weeks. This drop happened during early Tuesday trading in the Asian session. Many traders are waiting for the release of the US Consumer Price Index (CPI) data, which could affect the strength of the US dollar.
Right now, the US dollar looks stronger than the British pound. Recent weak economic data from the UK has increased the chances that the Bank of England (BoE) might cut interest rates in August. On the other hand, the US Federal Reserve is not expected to cut rates anytime soon. This difference in interest rate policies is putting pressure on the GBP/USD pair.
From a technical point of view, GBP/USD is below its 100-period moving average on the 4-hour chart, which shows a bearish trend. However, the RSI indicator suggests that the market is in an oversold zone. This means there could be a short recovery or sideways movement before any further fall.
If the pair tries to go up, it may face resistance near 1.3470 and again at 1.3500. A strong move above these levels might take the price to 1.3550 or even 1.3600. On the downside, if it breaks below 1.3400, it could fall toward 1.3355 or even 1.3300, with strong support near 1.3265.
Impact:
The upcoming US CPI report could move the GBP/USD pair. If inflation is high, the pair might drop more. A weaker CPI could support a short-term bounce.