GBP/USD testing 1.2550 ahead of UK CPI

The British Pound is advancing to 3-day tops vs. the buck on Tuesday, lifting GBP/USD to the mid-1.2500s.

GBP/USD attention to inflation data

The pair is clinching its second straight sessions with gains in the first half of the week, as GBP keeps showing a high degree of resilience despite the recent pick up in the demand for the greenback.

Spot has managed to advance to 3-day highs in the mid-1.2500s ahead of the opening bell in Europe today, all against a backdrop of renewed selling mood around the Dollar and ahead of key inflation figures to be released later.

In fact, market consensus expects consumer prices to have risen at an annualized 1.9% during January, while Core prices are seen gaining 1.8% on a yearly basis. Inter-month, the CPI is expected to have contracted 0.5%.

Across the pond, the salient event will be the semi-annual Humphrey Hawkins Testimony by Chair J.Yellen before the Senate Banking Committee. Further events include speeches by Richmond Fed J.Lacker (2018 voter, hawkish), Dallas Fed R.Kaplan (voter, centrist) and Atlanta Fed D.Lockhart (who will step down at the end of the month). Data wise, Producer Prices are only due.

GBP/USD levels to consider

As of writing the pair is up 0.15% at 1.2544 and a breakout of 1.2572 (high Feb.7) would open the door to 1.2680 (high Jan.26) and finally 1.2715 (high Feb.2). On the flip side, the immediate support aligns at 1.2436 (low Feb.10) followed by 1.2344 (low Feb.7) and finally 1.2250 (low Jan.19).