- GBP/USD continues scaling higher on Wednesday and shot to fresh three-month tops.
- The USD bearish pressure remained unabated after softer-than-expected US CPI figures.
- Slightly overbought conditions capped gains as the focus remains on the FOMC decision.
The GBP/USD pair maintained its strong bid tone through the early North American session, albeit struggled to extend the momentum beyond the 1.2800 mark and retreated few pips post-US CPI.
The pair prolonged its recent bullish trajectory and continued gaining positive traction through the mid-European session on Wednesday. This marked the tenth straight day of a positive move for the GBP/USD pair and was well supported by the prevalent selling bias surrounding the US dollar.
The USD bearish pressure remained unabated following the release of weaker-than-expected US consumer inflation figures. In fact, the headline CPI declined 0.1% in May as compared to a flat reading expected. Adding to this, the yearly rate eased to 0.1% as against 0.3% previous and 0.2% anticipated.
Meanwhile, the core CPI, which excludes energy and food costs, also fell short of consensus estimates and dipped 0.1% during the reported period. The softer US macro data did little to provide any respite to the USD bulls, albeit slightly overbought conditions capped any strong gains for the GBP/USD pair.
Investors also seemed reluctant to place any aggressive bullish bets, rather preferred to wait for the outcome of a two-day FOMC monetary policy meeting. The Fed is widely expected to leave interest rates unchanged. Hence, the key focus will be on the accompanying rate statement and the Fed Chair Jerome Powell’s comments at the post-meeting press conference.
Technical levels to watch
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