GBP/USD fades spike above weekly pivot

A quick fire jump in GBP/USD above weekly pivot level in of 1.2237 was quickly undone as investors await UK consumer price index release.

Eyes CPI release

The pair awaits UK CPI release, which is expected to show cost of living ticked higher in September possibly due to rise in imported inflation (weak Sterling) and higher energy prices.

Later in the day, US CPI is due for release and is expected to show an uptick in price pressures. Rate divergence is already at play and a strong US CPI number could further underscore the diverging rate expectations and lead to fresh sell-off in the pair.

GBP/USD Technical Levels

In terms of candlestick patterns, we have had a bullish inverted hammer candle on Oct 12. Acceptance above 1.2237 (weekly pivot) would open doors for 1.2332 (10-DMA), above which a major hurdle is seen 1.2407 (23.6% of 1.3437-1.2089). On the other hand, a breakdown of support at 1.2174 (session low) could yield a move to 1.2136 (previous day’s low). Next leg lower could run into support around 1.2089 (Oct 11 low).