FxWirePro: GBP/USD at crucial support ahead of inflation numbers

GBP/USD is treading waters around crucial support of 1.238 area, 2019 low as we head to European trading session, where inflation reports would be released from the United Kingdom for the month of June. The dataset would include consumer price index (CPI), Producer price index (PPI), Retail price index (RPI), and House price index (HPI), though the major focus would be on the CPI, which would be one of the most influencing factors for the central bank’s monetary policy.

The GBP/USD exchange rate is already hovering around the lowest level since January, and the ongoing strength of USD and retail sentiment points to further downside. As of today, according to the data from IG Markets, 80 percent of the retail positions are long on GBP/USD, which gives the pair a bearish bias, since retail sentiment works as a contrarian indicator.