GBP/USD fell to a low of 1.3010 in the aftermath of the report release
And is hovering nearby currently trading around 1.3015-20 levels. It's a soft report across the board with upward contribution to inflation coming from fuel and gas (but not as much as expected) while downside came from discounts for clothing, footwear. June fuel prices were expected to give a meaningful lift to inflation, but that hasn't been the case and the key thing here is that core inflation has now fallen below the BOE's inflation target of 2%.
This may not deter the central bank from hiking rates in August, but it will surely reaffirm we won't see another rate hike thereafter for quite some time to come. With food prices also dwindling further, I don't expect inflation to get back up to the upper end of the 2% levels any time soon.
As for cable, the pair now closes in on a test of the 1.3000 handle where bids and reported barrier is sitting. The low touched 1.3010 and sellers will be poised to sell on any rallies at this point.
Look out for the 1.3055 handle (38.2 retracement level) as an area sellers may lean on if there is any retracement in the move lower.
