FXStreet (Córdoba) - The GBP/USD moved further away from 1.7000 Tuesday, weighed by softer than expected UK inflation data, although the bearish move lacked momentum and the pair bounced shortly after.

The GBP/USD dipped to a fresh daily low of 1.6937 after data showed UK May CPI dropped 0.1% versus a rise of 0.2% expected, but it quickly bounced back to pre-data levels. At time of writing, the Cable is trading at the 1.6975 area, virtually unchanged on the day.

“Market players may decide to wait until the release of BoE’s minutes tomorrow, to decide whether the rate hike will come before the year end, leaving today’s reaction to bad news contained”, said Valeria Bednarik, chief analyst at FXStreet.

GBP/USD technical outlook

“A break below daily low of 1.6937 is now required to confirm a leg lower on the day, with next support in the 1.6910/20 price zone; only below this latter bears will take the lead, looking then for a dip down to 1.6870/80 price zone”, said Bednarik. “On the other hand, price needs to recover above 1.7000 to regain its upward strength, looking then for a quick test of 1.7040, August 2009 monthly high”.

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