GBP/USD Pumps to $1.2350 – Weaker CPI Figures in Play

The GBP/USD pair is underperforming in the Asian session as investors await the Federal Reserve’s (Fed) interest rate announcement for new indications. The Cable is trading around 1.2350, having corrected from a new six-month high of 1.2444.

Also, the US Dollar Index (DXY) is trading with a balanced profile because the market has calmed down before the Fed’s policy announcement. A two-month streak of slowing inflation has increased the likelihood of a lesser rate hike by Fed Chair Jerome Powell.

The GBP/USD pair has progressively corrected to about 1.2340, close to the 20-period Exponential Moving Average (EMA). Previously, the cable demonstrated a breakout of the Symmetrical Triangle chart pattern, indicating increased volatility. As a result, a modest upward trend reversal gives market players a new buying opportunity.

GBP/USD Technical Outlook

In addition, the Relative Strength Index (RSI) (14) has fallen into the 40.00-60.00 area, indicating that bullish momentum is dormant.

For a confident rebound, the Cable must break through Wednesday’s high of about 1.2379, pushing the asset toward Tuesday’s high of 1.2444, followed by a psychological barrier at 1.2500.

A decline below Friday’s low of roughly 1.2200, on the other hand, will drive the asset down to the December 7 low of 1.2107. A bearish breakout of the latter will expose the major to further declines toward the November 15 peak at 1.2029.