The cost of living in the UK as represented by the Consumer Price Index (CPI) for May month is due in about 30 minutes from now, on Wednesday at 06:00 GMT.

Given the recent buoyant UK job data, as well as hawkish fears about the Bank of England’s (BOE) next moves, today’s British inflation figures will be critical for GBP/USD speculators. The imminent BoE interest rate decision on Thursday adds to the importance of the UK CPI.

However, headline CPI inflation is predicted to fall to 8.4% year on year in May, from 8.7% previously. Furthermore, the Core CPI, which excludes volatile food and energy categories, is expected to remain stable at 6.8% year on year. In terms of monthly numbers, the CPI could fall to 0.5% from 1.2% previously.

GBP/USD remains defensive above 1.2750, mildly bid near 1.2765 at press time, as it fails to replicate the previous two days’ negative performance ahead of crucial UK inflation data. Nonetheless, the US-China conflict and the Fed’s considerably more hawkish views than the Bank of England (BoE) officials, combined with UK recession fears, encourage Cable pair buyers.

However, positive UK employment statistics and the Bank of England’s (BoE) policymakers’ desire for higher rates keep the prospect of more Pound Sterling gains alive ahead of critical British inflation data.

However, given the recent improvement in British data and predictions of addressing labor issues, lower UK inflation data may help GBP/USD bears retake control. It’s worth emphasizing that a positive surprise in UK CPI or Core CPI should be taken with a grain of salt in the face of hawkish Fed expectations.

Technically, the Cable pair has rallied off the bottom line of the mentioned rising wedge, which, together with the steady RSI (14) suggests that the quotation will continue to rise. However, the 21-SMA surrounding 1.2435 limits the GBP/USD price’s immediate gain.

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