• 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
