GBP/USD bursts out of consolidation, eyes on key daily resistance

• GBP/USD pops on U-turn budget speculation with daily resistance eyed. 
• Eyes turn to US CPI as the main event for the week. 

GBP/USD has rallied in recent trade ahead of the US inflation data at the top of the hour. At the time of writing, GBP/USD is trading at 1.1250 and popped 1.1299 amid more positive UK political noise. There are reports that there could be a UK budget U-turn with Tuss advocating raising corporation tax. Sky News reported that talks are underway over whether to reverse parts of the mini-budget although chancellor Kwasi Kwarteng has been reiterating his tax-cutting agenda.

Meanwhile, the Bank of England confirmed on Wednesday it's emergency bond-buying scheme will end on Friday as expected. However, the Financial Times reported that the central bank has signalled privately to bankers that it could extend its emergency bond-buying programme, raising some confusion among investors. Either way, volatility is back in the binds and the long-dated UK gilt prices have rallied sharply, pushing yields down by as much as 42 basis points to 4.476%, easing back from 20-year highs struck on Wednesday.

Looking ahead, the US Consumer Price Index will be the driver for the immediate future, the main data release of the week. ''We expect the headline to print relatively low at 0.2% MoM in line with consensus, as gasoline prices continued to decline during September,'' analysts at Danske Bank said. ''For core, we continue to see modest upside risks to the consensus expectation, and forecast a rise of 0.5% MoM (consensus 0.4% MoM).''

GBP/USD technical analysis

September's high of 1.1736 is on the radar for the bulls on a break of the daily resistance. However, a strong inflation report from the US could see the greenback surge, and that means the recent supports and daily, and weekly lows will be eyed with a focus on 1.1050 first and then 1.0920s.