GBP/USD seesaws around 1.2140s trendless as traders eye US CPI

• GBP/USD is almost flat, unable to capitalize on the US Dollar weakness.
• Fed’s Powell speech did not provide any forward guidance for the February 1 FOMC meeting.
• GBP/USD Price Analysis: In the near term, it could test the 200-DMA.

The Pound Sterling (GBP) failed to hold to earlier gains against the US Dollar (USD) and augmented selling pressure dragged the GBP/USD down after hitting a daily high of 1.2178. An upbeat market sentiment, as portrayed by US equities, failed to propel the risk-perceived Sterling. At the time of writing, the GBP/USD is trading at 1.2145, slightly below its opening price.

GBP/USD traders brace for the US December's CPI report

Wall Street opened with solid gains after US Federal Reserve Fed Chair Jerome Powell’s speech on Tuesday failed to provide any forward guidance. However, according to Rabobank Analysts, “The Chair was, however, able to squeeze in reference to the Fed prioritizing inflation over employment in the near term, when he said that the case for monetary policy independence lies in the benefits of insulating monetary policy decisions from short-term political considerations.”

Investors shrugged off Powell’s words as US equities closed higher Tuesday. In the meantime, the GBP/USD failed to gain traction even though the greenback continued to weaken. The US Dollar Index, a gauge of the buck’s value against its peers, is losing 0.08% at 103.193.

An absent UK economic calendar keeps traders waiting for the release of the US Consumer Price Index (CPI) report Thursday. Street’s estimates of headline inflation are 0% MoM; on an annual basis, a dip to 6.5% is expected. Excluding volatile items, the so-called Core CPI is foreseen at 0.3% MoM, a tick higher than the previous month, while yearly, it is estimated to come at 5.7%.

GBP/USD Price Analysis: Technical outlook

GBP/USD’s price action in the last three days formed a bullish harami candlestick pattern, suggesting that sellers are moving in. But it should be said that the 200-day Exponential Moving Average (EMA) at 1.2107 would be difficult to surpass by sellers. However, if cleared, that could open the door for a GBP/USD retest of 1.2100, closely followed by the 20-day EMA at 1.2080.