GBP/USD fades a CPI-led spike to 1.3220

A renewed spurt of buying seen in the GPB lost legs near 1.3220 region, sending GBP/USD lower below 1.32 handle, where it now wavers.

GBP/USD eyes US datasets

Currently, GBP/USD now drops -0.45% to 1.3196, having failed once again to defend 1.32 barrier. The cable fails to sustain upbeat CPI-backed recovery and falls deeper into losses over the last hour as negative tones persistent on the European equities weigh down on the higher-yielding pound.

While strengthening US dollar against its major competitors, also adds to the renewed weakness seen in the major. Meanwhile, the USD index rises +0.19% to flirt with session highs reached at 96.80.

Further, the fresh selling in the major can be partly attributed to the cautious remarks delivered by BOE’s Prudential Regulation Authority (PRA) head Woods. BOE’s Woods noted that there are risks to UK financial stability from emerging market economies.

Next on the cards remains the US housing data, which will have significant impact on the greenback and eventually on the GBP/USD pair.

GBP/USD Levels to consider

The pair has an immediate resistance at 1.3249 (5-DMA), above which 1.3300 (round figure) would be tested. On the flip side, support is seen at 1.3176/75 (20-DMA/ daily S1) below that at 1.3150 (psychological levels).