GBP/USD clings to UK CPI-led gains to 1.2700 handle

The GBP/USD pair trimmed some of the upbeat UK CPI-led gains to session peak level near 1.2725 region but has been able to maintain its bid tone for the second consecutive session.

Currently hovering around 1.2700 region, the pair built on Monday's strong up-move and caught fresh bids at UK economic data came-in to show higher-than expected jump in consumer inflation during November. In fact, UK consumer inflation, as measured by CPI, rose 1.2% on yearly basis as compared to an expected rise of 1.1%. Today's CPI print added on to the recent encouraging UK data and lifted the pair to 5-day highs.

Further up-move, however, was restricted as investors seemed to have paused to and take some profits off the table ahead of this week's key central bank monetary policy decisions, Fed on Wednesday and BOE on Thursday. Also in focus on Wednesday would be a slew of important economic releases, including UK jobs report, monthly retail sales data and PPI print from the US.

Technical levels to watch

A follow through buying interest above 1.2725 level (session peak), is likely to lift the pair immediately towards 100-day SMA resistance near 1.2765-70 region. Alternatively, rejection from 1.2700 handle, leading to a subsequent drop below 1.2675-70 support, would negate possibilities of any further up-move and drag the pair back towards 1.2620-15 horizontal support.