GBP/USD extends UK CPI-led gains towards 1.3000, US data in focus

The GBP/USD pair staged a solid rebound from five-week troughs and rallied more-than one big figure so far this session, with the upside accentuated by latest upbeat UK CPI print.

GBP/USD takes-out 10-DMA at 1.2985

Currently, GBP/USD jumps +0.86% to fresh session highs of 1.2994, just a whisker short of 1.3000 – key psychological levels. The cable rose for the first time in nine straight sessions, as the bulls were finally rescued by stronger UK inflation reading, which took account of the Brexit aftershock.

The UK CPI rose to fresh 20-month highs in July, as the consumer prices rose 0.6% in the reported month, following the 0.5% hike seen previously.

Adding to the upbeat tone in the GBP/USD pair, broad based US dollar sell-off and oil-price rebound boosts the higher-yielding currency GPB. Meanwhile, the USD index slumps -0.85% to fresh two-month lows of 94 before the release of a flurry of crucial US economic reports due to be published in the American morning.

The US docket offers the inflation figures, along with building permits and housing starts. The CPI inflation will most likely cause another wave of volatility.

GBP/USD Levels to consider                           

The pair has an immediate resistance at 1.3000 (psychological levels), above which 1.3039 (Aug 12 high) would be tested. On the flip side, support is seen at 1.2863 (five-week low) below that  at 1.2849 (Jul 11 low).