GBP/USD sits higher following steady inflation data from the UK
The mini-rebound over the past few sessions also comes as the pair closed in on a test of the 1.2500 handle yesterday. The move higher earlier was stalled by the 23.6 retracement level @ 1.2566 but the pound has firmed since then on the back of steady inflation data.
In my view, the data earlier doesn't change much but it does highlight stable inflationary pressures in the UK despite a falloff in other major economies. That said, I'm still not convinced that it'll help alleviate any pressure off the pound in the bigger picture.
With Brexit concerns still paramount among the issues plaguing the currency, it's hard to imagine the pound rallying all too much on its own aside from profit taking and positioning reasons. For now, cable is making its way back towards the 100-hour MA (red line) where the near-term bearish bias will be tested.
The more immediate risk for cable today is of course the FOMC meeting. Hence, if you're going to hold a position into that, be sure to know that there's the risk of price action moving against you depending on the Fed's communique.
