During Wednesday’s Asian session, GBP/USD picked up bids to continue the previous day’s recovery to 1.2100. As a result, the Cable GBP/USD pair is approaching a one-week-old resistance line while also displaying the third rebound of the 50% Fibonacci retracement mark of July-August gains.

The Consumer Price Index (CPI) for July, which represents the cost of living in the UK, is due early on Wednesday at 06:00 GMT. Given the previously announced disappointing employment data and suspicions of the Bank of England’s (BOE) passivity, GBP/USD traders will eagerly watch today’s data.

The headline CPI inflation is predicted to return to a 30-year high of 9.8% YoY versus 9.4% previously, while Core CPI, which excludes volatile food and energy goods, is expected to rise to 5.9% YoY during the indicated month, up from 5.8% previously. In terms of monthly numbers, the CPI could rise to 0.4% from 0.8% previously.

It’s worth mentioning that the recent wage pressure and buoyant jobs report emphasizes the Producer Price Index (PPI) as a significant driver for the GBP/immediate USD’s direction.

However, the PPI Core Output YoY may grow from 15.2% to 15.9% on a non-seasonally adjusted basis, while monthly prints may fall to 0.0% from 0.8%. Furthermore, the Retail Price Index (RPI) is set to be released, with a YoY increase to 12.0% from 11.8% previously and an MoM decrease to 0.6% from 0.9% in previous readings.

GBP/USD Technical Outlook

The GBPUSD pair failed to break the 1.2030 level, rebounding strongly and approaching testing the previously broken support of the bullish channel, which has now turned into key resistance at 1.2140, due to technical factors that make us prefer to stay away until we get a clearer signal for the next trend.

The resumption of the bullish bias and trying to breach the mentioned resistance will push the price back to the main bullish track to achieve gains that begin at 1.2250 and extend to 1.2400, whereas breaking the 1.2030 support line represents a negative factor that will press on the price to drop strongly towards 1.1930 followed by 1.1800 areas.

Today’s trading range is predicted to be between 1.2010 support and 1.2200 resistance.

Today’s predicted trend: Neutral