GBP/USD trimming some gains, sees rejection from 1.2500 on UK CPI miss

• The GBP/USD is seeing some downside pullback on Wednesday.
• UK data came in softer than expected, capping off Pound Sterling gains.
• UK Retail Sales in the barrel for Friday.

The GBP/USD is paring back after a touch of the 1.2500 handle, testing back into the 1.2400 region after a broad miss for UK data and mixed US figures.

The UK Core Consumer Price Index (CPI) for the year into October printed at 5.7%, down slightly from the expected 5.8% and slipping further away from the previous month's 6.1% reading.

The UK Retail Price Index for the same period also slipped past expectations, printing at 6.1% versus the expected 6.4% and seeing a slide from the previous 8.9%.

On the US side, Core Producer Price Index (PPI) figures for the annualized period into October came in at 2.4%, slipping below the forecast steady print at 2.7%. Meanwhile, US Retail Sales also declined but managed to hold above expectations.

US Retail Sales in October declined by a slight 0.1%, holding above the forecast -0.3%, but still slipping back from the previous month's 0.9%, which was revised upwards from 0.7%.

UK Retail Sales figures are still in the pipe for Friday, and Sterling traders will be churning through the back half of the trading week.

GBP/USD Technical Outlook

The GBP/USD is getting hung up on the 200-day Simple Moving Average (SMA) after facing a tight rejection from the 1.2500 handle, and the pair's bullish bounce from 1.2200 is quickly coming under pressure.

Bids are being supported by a bullish break of the descending trendline drawn from July's peak near 1.3140, as well as the 50-day SMA currently rotating out of a descending pattern near 1.2260.

The medium-term floor on any bearish pullbacks will be October's low bids just above the 1.2000 major handle, as well as a rough support zone baked in near 1.2100.

GBP/USD Daily Chart

GBP/USD Technical Levels