• GBP/USD dipped on Wednesday as a benign U.S. CPI report reinforced expectations of a 25 basis point rate cut by the U.S. Federal Reserve next week..
• A Labor Department report revealed that the Consumer Price Index (CPI) rose 0.3% in November, matching forecasts, while the annual increase was 2.7%, in line with expectations.
• The report boosted the probability of a quarter-point rate cut by the Fed on December 18 to 96.4%, according to CME's FedWatch tool.
• Technical signals are bearish as RSI is at 49, daily momentum studies 5, 9 and 10 SMAs are trending down.
• Immediate resistance is located at 1.2827( 50%fib), any close above will push the pair towards 1.2873(Nov 12th high)
• Strong support is seen at 1.2713(38.2%fib) and break below could take the pair towards 1.2637(Dec 4th low).
Recommendation: Good to sell around 1.2750, with stop loss of 1.2850 and target price of 1.2680
