GBP/USD remains depressed, holds above 1.3000 mark post-US CPI

• GBP/USD failed to capitalize on the UK GDP report-led intraday uptick.
• Even a modest USD pullback from highs failed to impress bullish traders.
• The latest US consumer inflation figures did little to provide any impetus.

The GBP/USD pair dropped to fresh weekly lows during the mid-European session, with bears now looking to extend the downfall further below the key 1.3000 psychological mark.

The pair failed to capitalize on its intraday bounce, instead met with some fresh supply near the 1.3065 region and drifted into the negative territory for the second straight session on Wednesday. The early uptick was sponsored by better-than-expected UK GDP report and a modest intraday US dollar pullback.

Despite hopes of a US economic recovery, the greenback struggled to preserve its early gains amid uncertainty over the next round of the US fiscal stimulus measures. Even some strong follow-through uptick in the US Treasury bond yields failed to impress the USD bulls or provide any impetus to the GBP/USD pair.

Meanwhile, the latest leg of a sudden drop over the past hour or so lacked any obvious fundamental catalyst and could be solely attributed to some technical selling. However, it will be prudent to wait for some strong follow-through selling before traders start positioning for an extension of the recent pullback from multi-month tops.

On the economic data front, the headline US CPI rose 0.6% MoM in July as compared to 0.3% anticipated, while the yearly rate also surpassed consensus estimates and came in at 1% during the reported month. Meanwhile, core CPI (excluding energy and food costs) rose 0.6% and 1.6% on a monthly and yearly basis, respectively.

The data did little to influence the GBP/USD pair's momentum, warranting some caution for bearish traders. Hence, it will be prudent to wait for some follow-through selling below the 1.3000 mark before positioning for any further near-term depreciating move.

Technical levels to watch