GBP/USD Rebounds to 1.2650 Despite UK CPI Decline
GBP/USD has recovered 0.25% to 1.2650 following the release of UK inflation data showing CPI edged lower to 2.1% year-over-year in May from 2.3% previously. Core CPI also moderated to 3.5% from 3.9%, slightly above the 3.4% forecast. Despite the cooling inflation, sterling found support as the data remains above the Bank of England's 2% target, suggesting the BoE may maintain its hawkish stance. The pound's resilience reflects market expectations that UK rates will stay elevated longer than previously anticipated. Technical analysis shows GBP/USD bounced from key support at 1.2600, with immediate resistance at 1.2680 (50-day MA). A break above could target 1.2720, while failure to hold 1.2600 opens the path to 1.2550. Traders await Thursday's BoE policy decision for further directional clarity.
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