GBP/USD steady near 1.3450 as UK CPI shows mild uptick to 3.4%

GBP/USD maintains stability around 1.3450 following UK inflation data that showed a modest rise to 3.4% year-over-year, slightly above the expected 3.3% but still well above the Bank of England's 2% target. The pair gained approximately 20 pips (0.15%) in the immediate aftermath of the CPI release, reflecting market relief that inflation didn't accelerate more dramatically. Core CPI components showed mixed signals, with services inflation remaining sticky while goods inflation continued to moderate. The data supports market expectations for a cautious BoE approach to rate cuts, potentially keeping rates higher for longer than previously anticipated. Technical analysis shows immediate resistance at 1.3480, coinciding with the 50-day moving average, while support has formed at 1.3420. Traders are now focusing on upcoming UK retail sales data and any BoE official comments that might clarify the policy outlook in light of persistent above-target inflation.