GBP/USD testing lows near 1.2400 on CPI

The Sterling is now accelerating its daily downside, prompting GBP/USD to challenge daily lows in the 1.2400 neighbourhood.

GBP/USD weaker post-CPI, looks to Carney

Spot lost further momentum after inflation figures tracked by the CPI rose less than expected during October. In fact, consumer prices rose at an annualized 0.9% and 0.1% on a monthly basis, while Core prices rose 1.2% over the last twelve months.

Later in the session GBP will remain under pressure in light of the Inflation Report Hearing and testimonies by Governor Carney and MPC members Shafik, Saunders and McCafferty before the Treasure Select Committee.

The pair is retreating for the second consecutive session so far today, coming down from last week’s tops just below the 1.2700 handle. It is worth mentioning that GBP has been recently boosted by expectations of a stronger trade links between the UK and US after Trump was elected president.

On the positioning front, the CFTC reported that GBP speculative longs have dropped to 3-week lows, while net shorts have climbed to the highest level in the last three weeks during the week ended on November 8.

GBP/USD levels to consider

As of writing the pair is losing 0.67% at 1.2412 facing the next support at 1.2397 (low Nov.15) followed by 1.2355 (20-day sma) and finally 1.2349 (low Nov.9). On the flip side, a breakout of 1.2675 (high Nov.11) would aim for 1.2684 (55-day sma) and then 1.2796 (low Jul.6).

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