POUND DROPS AFTER SOFT UK INFLATION DATA

The British pound has pulled back sharply from the 1.3125 level against the U.S dollar, following much weaker than expected monthly inflation data from the United Kingdom.

Sterling dropped towards the 1.3000 level, as UK inflation data came in flat for the month of June, against an expected 0.2 percent uptick. The weaker than expected CPI figures have somewhat dampened expectations of a future UK rate hike.

The GBPUSD pair remains bearish in the short time, whilst trading below the calculated daily pivot point, at 1.3068. Sterling also risks further intraday losses whilst price trades well below the 1.3047 level.

Key technical support is found at the weekly pivot point, at 1.3010, and then the pivotal 1.2989 level. Further GBPUSD support is located at the H4 time frame 50 period moving average, at 1.2955.

To the upside, technical resistance is located at the former yearly price high, at 1.3047, and the daily pivot point, at 1.3068. Above 1.3068, resistance is found at the former weekly price high, at 1.3112.