• The GBP/USD pair  initially inched higher after UK inflation numbers in the European session  but reversed course in the US session as investors turned their focus to the upcoming U.S. Federal Reserve's closely-watched policy meeting.
   
• The Fed is widely expected to hike interest rates on Wednesday. It is less clear, however, if the central bank will indicate a more cautious pace of rate increases given a recent surge in Treasury yields and gains in the dollar.
   
• The ongoing weakness is set to continue for this pair as the resistance level at 1.2774 is likely to act as strong barrier to the bulls and bring a further decline towards lower levels in the short term.
   
• To the upside, immediate resistance can be seen at 1.2730, a break above this level would expose the cable to next resistance level at 1.2774 levels.
   
• To the downside strong support can be seen at 1.2655, a break below at this level will open the door towards next level at 1.2562.
  
  Resistance Levels
  
  R1:  1.2730 (Daily high)
  
  R2: 1.2774 (Dec 6th high)
  
  R3: 1.2851 (61.8 % Retracement level)
  
  Support Levels
  
  S1: 1.2655 (38.2 % Retracement level)                   
  
  S2: 1.2562 (23.6 % Retracement level)
  
  S3: 1.2500 (Psychological levels)