GBP/USD side-lined around 1.2420, eyes on UK CPI

The bulls are seen defending the bid so far in Tokyo, keeping GBP/USD largely flat-lined below 1.2430 levels amid resurgent USD demand and muted oil prices.

The spot extends its overnight side-trend into Asia, consolidating near two-day tops, as the bulls await a fresh impetus in the UK CPI release for next direction.

The UK CPI is expected to come in a tad weaker at 2.2% y/y in March versus a 2.3% reading booked last. On monthly basis, the consumer prices in the UK are expected to arrive at 0.3% versus 0.7% last.

Risk-on sentiment also underpins the sentiment around cable, although upside remains capped amid fresh bounce seen in the greenback against most of its major peers.

All eyes remain on the UK inflation figures due to be reported ahead of the US JOLTS job openings data and Fedspeaks due on the cards in the NA session.

GBP/USD Levels to consider            

Matias Salord, Analyst at FXStreet notes, “The technical bias is starting to point toward further losses, with the daily Momentum about to break under 100. The pair is currently at a key level and if it falls back under 1.2400 the odds for further declines are likely to rise. In the short-term, if the pound fails to rise above 1.2430, a drop back to 1.2400 is expected during the Asian session; if the slide extends, 1.2360 (Apr 10 low) and 1.2340 are potential targets. Support levels: 1.2395 1.2360 1.2335 Resistance levels: 1.2430 1.2505 1.2550.”