GBPUSD struggles to regain 1.1900 ahead of UK inflation, US Retail Sales

• GBPUSD stays defensive around three-month high, sidelined of late.
• Anxiety ahead of UK’s key data, Autumn budget joins Poland-inspired sour sentiment to challenge traders.
• Downbeat US data, hawkish expectations from BOE keep buyers hopeful.

GBPUSD seesaws around 1.1870 as it tries to defend the bulls despite reversing from a three-month high during early Wednesday morning in Europe. The Cable pair’s latest inaction could be linked to the mixed feelings surrounding Russia and the cautious mood ahead of the key data from the UK and the US.

Indecision over Russian missiles struck at the Polish border with Ukraine recently challenged the market’s sentiment and the GBPUSD traders. Following the missile fire, which killed two people, policymakers from the North Atlantic Treaty Organization (NATO) and the Group of Seven Nations (G7) called an emergency meeting. However, US President Joe Biden recently mentioned that based on the trajectory, it is unlikely that missiles were fired from Russia.

It should be noted that the downbeat employment data from the UK failed to tame the GBPUSD bulls amid the softer US Producer Price Index (PPI). That said, UK’s Claimant Count Change increased to 3.3K versus -12.6K forecasts and 25.5K prior whereas the Unemployment Rate rose to 3.6% while surpassing the market consensus and prior readings of 3.5%. On the other hand, US PPI for October eased to 8.0% YoY versus market forecasts of 8.3% and the downwardly revised prior of 8.4%. It’s worth noting that the monthly figure reprinted the 0.2% prior (revised from 0.4%) while easing below 0.5% expectations. Moreover, the Federal Reserve Bank of New York's Empire State Manufacturing Index jumped to 4.5 in November from -9.1 in October and the market expectation of -5.

On a different page, fears of more burden on the households due to the UK’s upcoming Autumn Statement, up for publishing on Thursday, joins the likely uptick in the US Retail Sales for October, expected 1.0% versus 0.0% prior, keeps the GBPUSD bears hopeful. However, UK Prime Minister (PM) Rishi Sunak’s recent diplomatic moves have been suggesting a positive surprise and can fuel the Cable price should today’s British Consumer Price Index (CPI) match the upbeat 10.7% YoY forecasts for October, versus 10.1% prior.

While portraying the mood, Wall Street closed with smaller gains than the early-day moves while the US 10-year Treasury yields struggle at a six-week low. That said, the S&P 500 Futures retreated from the monthly high.

To sum up, GBPUSD buyers are likely to witness further upside momentum should the scheduled data/events match the market consensus.

Technical analysis

GBPUSD retreats from a downward-sloping resistance line from June 15 amid a nearly overbought RSI. However, the bullish MACD signals and the sustained trading beyond the 100-DMA suggest the pair’s further advances.