FxWirePro: GBP/USD drops to 1-week low on cooler than expected UK CPI data

• GBP/USD hit one week low on Wednesday  after  lower than expected UK September CPI weighed on pound

• British inflation unexpectedly held steady in September, boosting hopes for a Bank of England rate cut this year and providing some relief to Finance Minister Rachel Reeves ahead of her November budget.

• Annual consumer price inflation remained at 3.8% for the third month running, its joint highest since the start of 2024, the Office for National Statistics said on Wednesday.

• Core inflation   which excludes volatile food and energy prices   and services inflation both came in below forecasts, prompting investors to increase bets on a Bank of England rate cut later this year.

• Investors priced in a 75% chance of a Bank of England rate cut in December, up sharply from 46% before the inflation data was released.

•   Immediate resistance is located at 1.3363(38.2%fib), any close above will push the pair towards 1.3398(SMA 20)

•  Strong support is seen at 1.3277(38.2%fib) and break below could take the pair towards 1.3230(Lower BB).

  Recommendation: Good to sell  around 1.3310 , with stop loss of 1.3380 and target price of 1.3230