GBPUSD falls below 1.30 following weaker-than-expected UK CPI data

Cable accelerated lower, breaking through the key psychological 1.30 support level, hitting its lowest point in nearly two months early Wednesday.

Sterling dropped 0.8% in response to UK inflation data, which showed a sharper-than-expected decline in September, falling below the BoE’s 2% target. This added to market expectations for further rate cuts by year-end.

The fresh weakness signals a continuation of the downtrend from the 2024 high of 1.3434 (Sept 26), with a close below 1.30 needed to confirm this trend.

A sustained break below 1.30 would target the 1.2958/52 levels (61.8% Fibo retracement of 1.2664/1.3434 and the 100DMA), along with the significant daily cloud base at 1.2941 and the 200DMA at 1.2792.

The technical outlook remains bearish, with strong negative momentum and the recent formation of the 10/55DMA cross weighing on near-term action. However, bears could struggle to break 1.30 cleanly, as the last attempt on Sept 11 was sharply rejected.

Any potential recovery should be capped at the cloud top (1.3054) and not exceed the falling 10DMA (1.3076) to maintain bearish momentum.

Res: 1.3049; 1.3071; 1.3113; 1.3140
Sup: 1.3000; 1.2982; 1.2952; 1.2941