GBP/USD surrenders early gains, retreat to 1.2415 ahead of UK CPI

The GBP/USD pair struggled to build on previous session's recovery move and has now reversed majority of daily gains to currently trade around the 1.2415 region. 

Lack of any follow through US Dollar buying interest, despite of overnight hawkish remarks by the Fed Chair Janet Yellen, helped the pair to gain some traction during early Asian session on Tuesday. Further up-move, however, remained limited as investors now look forward to the UK CPI print for fresh impetus. 

Meanwhile, geopolitical tensions continue to hold the centre stage and have been seen supporting the greenback's safe-haven appeal against its British counterpart and collaborating towards capping any further up-move for the major. 

   •  Rising geopolitical tensions favour USD - Rabobank

Tuesday key focus would be on the UK inflation figures, with the headline CPI expected to drop to 0.3% m-o-m and the yearly rate holding stable at 2.3% for March. Later during the NY session, the release of US JOLTS openings data and speech by the Minneapolis Fed President Neel Kashkari would also be looked upon for some short-term trading impetus.

Technical levels to watch

Immediate support is pegged near the 1.2400 handle, below which the pair is likely to accelerate the slide back towards 1.2375-70 important support. A follow through selling pressure would turn the pair vulnerable to extend the slide towards mid-1.2300s, en-route 1.2325-20 support area. 

On the upside, momentum above 1.2425-30 area is likely to confront strong resistance near 1.2450 level, above which a bout of short-covering is likely to lift the pair towards 1.2480-85 horizontal resistance ahead of the key 1.25 psychological mark.