GBP/USD once again fails near 1.3370 on upbeat US data

   •  Good two-way moves post-UK CPI release. 
   •  USD gains traction on upbeat PPI print for Nov.
   •  FOMC/BOE decisions awaited for directional impetus.

The GBP/USD pair once again failed to clear the 1.3370 supply zone and quickly retreated around 30-35 pips following the release of stronger-than-expected US PPI print.

The US Dollar recovered early lost ground and gained some positive traction after data released from the US showed producer prices rose at the fastest pace in 2016. With the post-UK CPI volatility now seems to have receded, a modest pickup in the greenback demand seems to be the only factor prompting some fresh selling at higher levels. 

Despite good two-way moves, the pair still seemed lacking any firm directional bias as investors now seemed reluctant to place aggressive bets and preferred to wait on the sidelines ahead of this week's key central bank decisions - the expected Fed rate hike announcement on Wednesday and the BOE on Thursday.

This along with important macro data, which includes UK labor market report and the latest US inflation figures, both due for release on Wednesday, should help investors determine the pair's next leg of directional move. 

Technical outlook

Valeria Bednarik, American Chief Analyst at FXStreet writes, "the upward potential seems limited according to technical readings in the 4 hours chart, as technical indicators have recovered modestly, but hold within negative territory, while the price keeps developing below a bearish 20 SMA. On a positive note, the price is above the 61.8% retracement of its latest bullish run, around 1.3340, acting as strong support for a second consecutive week, but below the next Fibonacci level, the immediate resistance around 1.3385."