GBP/USD remains well bid above mid-1.2500s, or weekly tops post-US CPI

• Hotter-than-expected US headline and core CPI help ease the USD bearish pressure.
• Expectations of a 50 bps rate cut by the Fed might cap any attempted USD recovery. 

The GBP/USD pair maintained its strong bid tone through the early North-American session, albeit retreated few pips from weekly tops post-US CPI.

The bearish pressure surrounding the US Dollar - triggered by the Fed Chair Jerome Powell's dovish remarks, eased a bit following the release of slightly stronger-than-expected US consumer inflation figures for June.

In fact, the consumer inflation - as measured by headline CPI, ticked higher by 0.1% during the reported period as compared to consensus estimates pointing to a flat reading expected, while the yearly rate held steady at 1.6%.

Meanwhile, the core CPI - excluding food and energy costs, also bettered market expectations - rising 0.3% and 2.1% on monthly and yearly basis respectively and provided a much-needed respite to the USD bulls.

However, the fact that market participants have already started pricing in a 50 bps rate cut by the Fed later this July kept a lid on any strong USD recovery and should help limit any meaningful pullback, at least for now.

Technical levels to watch