GBP/USD Price Forecast: Continues to remain flat ahead of US CPI data

The British Pound (GBP) is currently trading at a stable level around 1.3500 against the US Dollar (USD) during Wednesday's European trading session. Investors are closely monitoring the upcoming US Consumer Price Index (CPI) data for July and the UK Q2 Gross Domestic Product (GDP) data, which is scheduled to be released on Thursday.

The US CPI data is anticipated to significantly influence Federal Reserve (Fed) interest rate expectations due to remarks made by Chairman Kevin Warsh at the July policy meeting press conference, which highlighted growing concerns about rising inflation risks. Analysts from Danske Bank emphasize that the release of the July US CPI data is crucial, with a forecast of headline inflation at 0.2% month-over-month and 3.4% year-over-year.

Core inflation is expected to be around 0.2% month-over-month and 2.5% year-over-year. On Thursday, the UK Q2 GDP data is projected to show growth of 0.4% compared to the previous quarter of 0.6%, while the annualized growth rate is anticipated to be 1.1%, which is an improvement from the previous reading of 0.9%. The GBP/USD pair is trading near the 20-day exponential moving average (EMA) at 1.3437 and has broken through the downward resistance trend line, now providing support around 1.3465.

This suggests a positive bias for the pair as it consolidates near recent highs. The Relative Strength Index (14) at approximately 60 indicates sustained upward momentum without entering an overbought territory, implying that buyers continue to influence the near-term market direction as long as the price remains above these key supports.

Should the price dip below the 20-day EMA at 1.3437, the next level of support would be the July 28 low at 1.3273. Should the pair rally above the August 10 high of 1.3530, it could potentially target the 1.3600 mark.