GBP/USD 'Tests' Another $1.2700 As Focus On US CPI Data

<p>&nbsp;There were price fluctuations that confused investors on the chart of the GBP/USD currency pair in the New York session yesterday when the inflation data of the United States (US) came into focus.</p><p><br /></p><p>The latest US inflation rate for December recorded a higher increase than forecast and projected expectations for the Federal Reserve (Fed) to first delay steps to lower interest rates.</p><p><br /></p><p>Thus, the US dollar has shown a strengthening in the initial reaction of the data being published.</p><p><br /></p><p>However, the momentum started to fade in trading towards the end of the session causing the direction of the price movement to change.</p><p><br /></p><p>If observed, the price reached the high level of 1.27800 first which overcame last week's trade.</p><p><br /></p><p>Then the price plunge took place, seeing the price towards the level of 1.27000 which was the focus of being tested several times from the beginning of the week.</p><p><br /></p><p>A reaction was observed and once again the level managed to prevent further declines following the release of US inflation data.</p><p><br /></p><p><br /></p><p>The strengthening momentum that the US dollar failed to maintain saw the price bounce back from the 1.27000 level to the height of 1.28000 and resumed trading today (Friday).</p><p><br /></p><p>The price movement is holding above the Moving Average 50 (MA50) support line on the 1-hour time frame on the GBP/USD chart, which indicates a bullish pattern for the price.</p><p><br /></p><p>If the increase continues after this, the 1.28000 zone is seen as an important focus to be tested again like the trade at the end of last December.</p><p><br /></p><p>But if the US dollar is strong again, the price drop is likely to happen again towards the 1.27000 level.</p><p><br /></p><p>If the support level is finally broken through, the price will drop lower to show a bearish movement towards the target zone of 1.26000.</p>