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  • Poor economic data from the UK continues to push the pound lower against the dollar.
  • There is general caution in the market ahead of the European Central Bank meeting.
  • The White House expects US inflation to be elevated.
  • GBP/USD is caught in a range on the 4-hour chart.

The GBP/USD price closed Wednesday on a bearish candle and has continued to push lower since Thursday morning. This move came after the release of the construction PMI for the UK.

Investors had expected the value to drop to 56.6 from 58.2, but it dropped lower to 56.4. Although the reading was above 50, showing expansion in the construction sector, the drop pointed to a reduced activity level by purchasing managers.

House price inflation in the UK went down after the Royal Institution of Chartered Surveyors reported the house price balance at 73%, down from 80% in May. Investors had expected it to drop to 76%, so the news was a surprise and bearish for GBP/USD.

However, this downward move for the pair was capped by the overall caution in the market ahead of the ECB meeting later in the day. The wait for US price data also pushed US Treasuries lower and yields higher. The White House expects the US CPI to be elevated, and according to a Reuters poll, economists expect annual inflation to be 8.3%.

GBP/USD key events today

There are no critical news releases in the UK, so investors will be looking out for the Initial Jobless Claims report from the US that will be released later in the day.

GBP/USD price technical analysis: Bears to test 1.2475

GBP/USD price

Looking at the 4-hour chart, the price is trading sideways and caught between 1.2600 and 1.2475. There is caution in the market, and neither bulls nor bears are willing to take charge. The price is currently pushing towards the range support at 1.2475.

 

Short-term bears will try to break the support, but we might see the price returning to the range resistance if they fail. The 30-SMA is also trading sideways and chopping through the price. A trend will only come when the price starts trading below or above the 30-SMA.

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