• GBP/USD hovered below the 1.3400 level on Wednesday as investors digested cooler-than-expected UK inflation data.
• British inflation eased more than expected in June as lower fuel prices, driven by the U.S.-Iran de-escalation, provided temporary relief for new Prime Minister Andy Burnham's cost-of-living challenge.
•Consumer prices rose by 2.6% in annual terms in June the weakest increase since March 2025 and down from 2.8% in May.
• The Bank of England, which targets 2% inflation, expects inflation to rise to 3% in the third quarter.
• The Bank of England meets next week and is widely expected to keep interest rates unchanged, though markets still price in at least one 25-basis-point rate hike by December, with a 72% chance of another increase.
• Immediate resistance is located at 1.3475(50%fib), any close above will push the pair towards 1.3528(50%fib)
• Strong support is seen at 1.3371(SMA 20) and break below could take the pair towards 1.3324(38.2%fib).
Recommendation: Good to sell around 1.3380, with stop loss of 1.3470 and target price of 1.3310
