GBP/USD cycles familiar territory ahead of UK CPI print

• GBP/USD churned just north of 1.3000 for a fourth straight trading day.
• UK labor figures were a non-starter on Tuesday.
• Cable markets are awaiting Wednesday’s upcoming UK CPI inflation update.

GBP/USD churned chart paper in familiar territory for a fourth consecutive trading day on Tuesday. Cable continues to cycle in a dead zone between 1.3100 and 1.3000 as GBP traders await meaningful UK data updates before picking a side to fall on.

UK wages data largely came in as expected on Tuesday, but GBP traders took note of an unexpected uptick in September’s Claimant Count Change, which jumped to 27.9K for the month, compared to the expected 20.2K against August’s 23.7K. On the other side of the same coin, the UK’s ILO Unemployment Rate also ticked down to 4.0% from the expected hold at 4.1%.

Wednesday’s upcoming UK Consumer Price Index (CPI) inflation figures are expected to broadly move lower in September. Headline CPI inflation for the year ended in September is forecast to fall to 1.9% YoY versus the previous period’s 2.2%. Core annualized CPI inflation, meanwhile, is forecast to tick down to 3.4% YoY from the previous 3.6%.

Greenback traders will be looking out for Thursday’s US Retail Sales figures for September, with the UK’s own Retail Sales print slated for Friday. US Retail Sales are expected to bounce to 0.3% MoM in September versus the previous 0.1%, while the UK’s own September Retail Sales figures are forecast to fall into contraction territory, from 0.1% to -0.3%.

GBP/USD price forecast

GBP/USD continues to churn in a volatility trap, squeezed between the 1.3000 major price handle and the 50-day Exponential Moving Average (EMA) falling into 1.3100. Technical indicators have become mired in near-term congestion warnings as Cable flounders on the low end of a pullback from late September’s peaks just north of 1.3400.

GBP/USD daily chart