Cable Remains Firm as Markets Await UK Inflation Data and BOE Meeting

The near-term recovery from the higher base around the 1.3300 zone has gained fresh traction, supported by an improving geopolitical backdrop that has boosted risk sentiment and weighed on the US dollar.

Although price action remains relatively subdued ahead of key event risks, GBP/USD continues to trade with a positive bias as investors await the release of May UK inflation data on Wednesday. Headline CPI is expected to rise to 3.0% from 2.8% in April. An outcome in line with or above expectations could reinforce market speculation that the Bank of England may need to tighten policy further in the coming months. The BoE’s Monetary Policy Committee is scheduled to announce its decision on Thursday and is widely expected to leave interest rates unchanged at 3.75%.

The broader near-term structure remains constructive while the pair holds above key support levels at 1.3415 (200-day moving average) and 1.3408 (daily cloud base). Focus remains on initial resistance at 1.3477, the 50% Fibonacci retracement of the 1.3653–1.3301 decline, followed by the more significant barrier at 1.3486 (cloud top). A sustained break above this zone would strengthen bullish prospects and further confirm the formation of a base around 1.3300.

Daily technical studies remain mixed, although momentum indicators are beginning to improve. The 14-day momentum oscillator is on the verge of returning to positive territory, while the RSI has moved above the neutral 50 level, both of which support a more constructive near-term outlook.

Res: 1.3477; 1.3486; 1.3508; 1.3521
Sup: 1.3415; 1.3408; 1.3362; 1.3341