Photo by Colin Watts on Unsplash 
 

GBP/USD edges modestly lower on Wednesday as inflation in the United Kingdom (UK) ticked lower in October, increasing the chance of an interest rate cut by the Bank of England (BoE) in December. At the time of writing, the pair trades at 1.3120 after reaching a peak of 1.3155.

Sterling eases after CPI cools further, boosting expectations for an 85%-probability rate cut ahead of next week’s Autumn Budget
 

The Office for National Statistics (ONS) revealed that the Consumer Price Index (CPI) dipped from 3.8% to 3.6% YoY in October, as expected. Core CPI slipped from 3.5% to 3.4% YoY, its lowest since March. The Pound Sterling (GBP) dipped as investors grew confident that the BoE may reduce borrowing costs at the December meeting.

The Pound could take a hit next week with the release of the Chancellor Rachel Reeves' Autumn Budget, on November 26.

Money markets had priced in an 85% chance of a quarter-percentage-point rate cut, according to LSE data.

In the US, Initial Jobless Claims for the week ended October 18 rose by 232K, triggering no reaction in financial markets. Besides traders waiting for the release of the Fed’s last meeting minutes, they are laser-focused on Thursday's Nonfarm Payrolls figures for September, which are expected to come at 50K, up from August’s 22K print.

The US Census Bureau announced that it would publish the September Retail Sales and Durable Goods Orders next week.

Ahead, Fed officials Governor Stephen Miran and regional Fed Presidents John Williams and Thomas Barkin will cross the wires.

GBP/USD Price Forecast: Technical outlook
 

Technically speaking, GBP/USD reached its lowest level in five days, at 1.3092, an indication that the downtrend continues. Momentum is bearish as depicted by the Relative Strength Index (RSI).

If GBP/USD cracks below 1.3100, the next support would be the last cycle low of 1.3010, hit in early November. Conversely, if buyers clear the 20-day SMA at 1.3173, the next key resistance in play would be 1.3200.
 

GBP/USD daily chart

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