GBP/USD faces barricades around 1.1900 on UK’s political turmoil, US Inflation eyed

• GBP/USD has sensed offers around 1.1900 as investors await US Inflation.
• The number of suitable candidates for the leader of the US Conservative Party is increasing.
• Plain-vanilla CPI is seen at 8.8% while the core CPI is expected to slip to 5.7%.

The GBP/USD pair has witnessed selling pressure after attempting to sustain above the crucial level of 1.1900. On a broader note, the asset went through a steep fall after surrendering the weekly support at 1.1876 and printed fresh weekly support at 1.1807. The cable has attempted a pullback, however, the downside remains favored ahead of the US Inflation.

Investors are expecting that the US Consumer Price Index (CPI) will elevate to 8.8% from the prior release of 8.6%. However, the core CPI will slip to 5.7% from the prior print of 6%. A divergence in the two critical catalysts indicates two outcomes. Volatile food products and energy prices are driving the plain-vanilla CPI figure higher. And, products in core CPI such as durable goods, automobiles, and other necessary goods are experiencing a cool-off in their heated price rise.

This indicates that the policy tightening measures, which have been deployed by the Federal Reserve (Fed) in their past three monetary policy meetings, have started reflecting their impact now.

On the UK front, ongoing political turmoil after the announcement of resignation by current PM Boris Johnson has spooked the sentiment of the market participants. The list of participants for being the leader of the Conservative Party is getting wide each passing day. Apart from that, investors will focus on the UK economic data. The Gross Domestic Product (GDP) is seen at 0% vs. -0.3% printed earlier. While the annual Manufacturing Production may slip to 0.3% from the former release of 0.5%.