GBP/USD has regained its traction following Wednesday's wobbly action. Near-term bullish bias stays intact while eyes turn to US Consumer Price Index (CPI) data for January, FXStreet’s Eren Sengezer reports.

Dollar could capitalize on hot inflation data and force GBP/USD to turn south

“The US Bureau of Economic Analysis will release the CPI data for January. In case this report suggests that inflation in the US continued to heat up at the beginning of the year, market participants could price in an aggressive rate hike in March and help the dollar outperform its rivals. On the flip side, the greenback is likely to come under renewed selling pressure in case the CPI readings fall short of estimates.”

“1.3600 (psychological level) aligns as the next immediate target on the upside before 1.3620 (static level) and 1.3650 (static level).” 

“In case the pair reverses its course on strong CPI figures, 1.3540 (200-period SMA) is the first support ahead of 1.3520 (Fibonacci 38.2% retracement of the latest uptrend, 100-period SMA) and 1.3500 (psychological level, Fibonacci 50% retracement).”

See – US CPI Preview: Forecasts from 10 major banks, higher but showing moderation