GBPUSD dips below 1.30 on softer than expected UK inflation data

Cable accelerated below 1.30 support in early Wednesday, following softer than expected UK inflation data for June, which should ease pressure on Bank of England to continue its cycle of sharp interest rate raising.

Inflation in Britain fell to 7.9% in June from 8.7% previous May and fell below 8.2% forecast, while core CPI (closely watched by BoE), stripped for volatile food, energy, alcohol and tobacco components, fell to 6.9% last month, from 7.1% in May (the highest in over three decades) and also below consensus at 7.1%.

Better than expected inflation data generated initial signal that strong rise in consumer prices might start to recede and made immediate impact on rate outlook, dropping bets for next month’s hike from 50 to 25 basis points.

The pair extends pullback from new 2023 high (1.3141) into fourth consecutive day and dipped below psychological 1.30 support.

Fresh bearish acceleration cracked next pivotal support at 1.2931 (Fibo 38.2% of 1.2590/1.3141 upleg, reinforced by daily Tenkan-sen), with close below here to boost bearish signal and open way for deeper correction.

Daily studies show fading bullish momentum (although 14- momentum indicator is still deeply in positive territory) and RSI / stochastic in step decline, which add to negative near-term outlook

Bears may take a breather for consolidation, with near-term action to remain biased lower while capped under 1.30 pivot.

Res: 1.3000; 1.3055; 1.3100; 1.3141
Sup: 1.2931; 1.2866; 1.2830; 1.2801