The GBPUSD, trading at 1.27636, has temporarily stopped its bounce-back from a one-week low due to a two-day losing streak as the UK inflation data approaches. According to @nehcap, there is a probability of further decline.

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• GBP/USD pauses corrective bounce off one-week low after two-day losing streak as UK inflation data looms.

The pair currently trades last at 1.27636.

The previous day high was 1.2837 while the previous day low was 1.277. The daily 38.2% Fib levels comes at 1.2796, expected to provide resistance. Similarly, the daily 61.8% fib level is at 1.2812, expected to provide resistance.

GBP/USD fades corrective bounce off weekly low as it retreats to 1.2760 amid the early hours of Wednesday’s Asian session, sidelined of late. In doing so, the Cable pair inability to defend the previous week’s upside break of a five-month-old resistance line amid the overbought RSI conditions. It’s worth noting that the Pound Sterling’s latest inaction could be linked to the market’s cautious mood ahead of the UK’s top-tier inflation clues including the Consumer Price Index (CPI) for May.

Also read: GBP/USD retraces below 1.2800 on a strong USD, ahead of Powell testimony, BoE’s decision

Given the overbought RSI (14) line and the Cable pair’s inability to stay beyond the key resistance line, the GBP/USD bears are well-set to extend the previous two-day downtrend. However, the previous monthly high join the 10-DMA to highlight the 1.2685-80 region as the short-term key support zone for them to conquer to tighten the grip.

Also acting as a short-term downside filter is an upward-sloping trend line from June 05, close to 1.2645 by the press time.

In a case where the GBP/USD pair breaks the 1.2645 support, the early June swing high of near 1.2545 will precede a 3.5-month-old ascending support line, close to 1.2475, to please the bears before directing them to the January 2023 peak of near 1.2450.

On the contrary, GBP/USD recovery needs to cross the latest monthly peak of around 1.2850 to aim for the early April 2022 low of near 1.2975-80.

Following that, the 1.3000 psychological magnet may act as an extra check for the Pound Sterling bulls before giving them control.

Trend: Further downside expected

Technical Levels: Supports and Resistances

GBPUSD currently trading at 1.2764 at the time of writing. Pair opened at 1.2792 and is trading with a change of -0.22 % .

The pair remains strongly bullish on the daily timeframe. It trades above its 20 SMA @ 1.2513, 50 SMA 1.25, 100 SMA @ 1.2328 and 200 SMA @ 1.2051.

The previous day high was 1.2837 while the previous day low was 1.277. The daily 38.2% Fib levels comes at 1.2796, expected to provide resistance. Similarly, the daily 61.8% fib level is at 1.2812, expected to provide resistance.

Note the levels of interest below:

• Pivot support is noted at 1.2762, 1.2733, 1.2696
• Pivot resistance is noted at 1.2829, 1.2866, 1.2896

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