GBP/USD Tests Critical 1.3430 Support Ahead of Key US CPI Release

GBP/USD is hovering precariously near the 1.3430 support level as traders position ahead of the crucial US CPI inflation data. The pair has declined 0.5% this week amid broad dollar strength and uncertainty surrounding UK economic prospects. The US Dollar Index has gained momentum, supported by rising US 10-year Treasury yields which have climbed 8 basis points to 4.32%. Market participants are particularly focused on today's inflation reading, with expectations for core CPI to remain sticky at 3.3% year-over-year. A break below 1.3430 could accelerate sterling's decline toward the 1.3380 zone, while an upside surprise in inflation could push the pair through 1.3500 resistance. Technical indicators suggest bearish momentum is building, with the RSI approaching oversold territory. The Bank of England's relatively dovish stance compared to the Fed's hawkish pivot has weighed on sterling sentiment recently.