GBP/USD coils ahead of key UK CPI inflation print

• GBP/USD continues to hold steady near the 1.3000 region.
• Key UK CPI inflation data is due early on Wednesday.
• US Durable Goods Orders due later on during the American trading window.

GBP/USD continues to wear worry lines into the charts near the 1.3000 handle as Cable traders draw into the midrange after a near-term bullish recovery lost steam. The pair has yet to draw in a confirmed pullback, as both Pound Sterling and Greenback traders await firmer signs of economic health from either economy.

The US Conference Board (CB) reported a further increase in one-year consumer inflation expectations on Tuesday, now at 6.2% in March compared to 5.8% in February. Consumers continue to express significant concern regarding the persistently high prices of essential household items, such as eggs, along with worries about potential inflation consequences tied to tariffs from the Trump administration. Additionally, the CB's consumer confidence survey for future economic expectations has dropped to a new 12-year low in March, recording a figure of 65.2, which is substantially below the 80.0 threshold that often indicates a potential recession.

Compounding these issues, Moody's ratings agency issued a stark warning early Tuesday, stating that the US's fiscal strength has "deteriorated," particularly emphasizing the growing issues with the affordability of US debt servicing. Furthermore, Moody's indicated that the fiscal strength of the US is on course for a multi-year decline, a remark that is likely to provoke dissatisfaction from Donald Trump and his administration, who are presently seeking a significant increase in the debt limit from Congress.

UK Consumer Price Index (CPI) inflation figures are due early Wednesday, which could stoke GBP volumes. Median market forecasts are expecting annualized headline CPI inflation to tick down to 2.9% YoY versus the previous print of 3.0%, however the monthly figure is expected to accelerate to 0.5% MoM in February. January's monthly CPI print initially contracted by 0.1%, and traders will be keeping a close eye out for any heavy revisions to recent data.

On the US side, Durable Goods Orders are due during the New York market session. Overall Durable Goods Orders are expected to decline in February, forecast to come in at -1.0% after January's firm 3.2% rebound.

GBP/USD price forecast

GBP/USD continues to find room to play as price action remains locked in a near-term sideways grind between 1.3000 and 1.2900. Bids remain unable to find traction on either side of the rough congestion pattern, though Cable bulls will be able to find some room to breathe as intraday momentum remains firmly above the 200-day Exponential Moving Average (EMA) near 1.2700.

GBP/USD daily chart