GBP/USD sits tight in anticipation of US CPI event

• GBP/USD bears are eyeing a move to test key structure. 
• US CPI event is key for forex space that is currently treading water. 

GBP/USD has been stuck in a tight pre-US Consumer Price Index red calendar event range in Asia of between 1.2132 and 1.2165. The bears have been in control for the most part within a choppy phase of consolidation below the initial balance highs for the week above 1.2200. 

The forex space is reading water into the US CPI event later today with investors hoping for a clearer picture of where interest rates in the United States are headed. Fed Chair Jerome Powell did not give any policy clues during a panel discussion in Stockholm on Tuesday, but we did hear from other Federal Reserve speakers, with Boston's Susan Collins going against the grain with dovish remarks reported by the New York Times on Wednesday. 

Collins was reported saying that she was leaning toward a quarter-point move at the central bank’s February 1 meeting. "I think 25 or 50 would be reasonable; I'd lean at this stage to 25, but it's very data-dependent," Collins said in an interview with The New York Times. Earlier in the week, we heard from more hawkish speakers. Atlanta Federal Reserve bank president Raphael Bostic said on Monday that it is ''fair to say that the Fed is willing to overshoot.'' San Francisco Federal Reserve Bank President Mary Daly is dropping important comments in live questions and answers with the Wall Street Journal.

US CPI eyed

As for the CPI event, analysts at TD Securities explained that they are looking for the core Consumer Price Index to have edged higher on a monthly basis in December, ''closing out the year on a relatively stronger footing,'' they said.

''Indeed, we forecast a firm 0.3% MoM increase, as services inflation likely gained momentum. In terms of the headline, we expect the Consumer Price Index inflation to register a slight decline on an unrounded basis in December, but rounded up to flat MoM, as energy prices offered large relief again. Our MoM projections imply that headline and core CPI inflation likely lost speed on a YoY basis in December.'' 

GBP/USD technical analysis

As per the prior analysis, GBP/USD Price Analysis: 1.2100 under pressure ahead of key US CPI event, 1.2170, 1.2150 and 1.2113 (daily W-formation neckline target area) areas were meanwhile key structure target levels that have either given out or are being tested, guarding against a full-on capitulation of the bulls and bears taking over towards the 1.1900 target area: