GBP/USD remains steady around 1.2550 with all eyes on US CPI

• The pound is moving sideways ahead of the US CPI data.
• Upbeat UK employment data has provided some support to the Pound
• GBP/USD maintains a neutral bias between 1.2500 and 1.2600.

The Sterling is trading without a clear direction on Tuesday, moving both sides of the 1.2550 level, as the market braces for November’s US CPI reading.

UK Unemployment data supports the Pound

Earlier on Tuesday, the UK Employment report showed that the labour market remains resilient despite the restrictive interest rates, which has provided a fresh impulse to the pair.

Unemployment in the UK has remained flat at a 4.2% rate in October, with the number of jobless workers increasing by 16K, instead of the 20.3K expected by the market.

The pair’s rebound, however, has been limited, as traders are reluctant to place significant bets against the US Dollar ahead of the release of the US inflation data.

Consumer prices are expected to have risen at a 3.1% yearly pace, down from the 3.2% pace seen in September. The core inflation is seen steady at 4%. These figures will be watched with interest as they will guide Wednesday’s Fed monetary policy decision.

The technical picture shows the pair’s reversal from last week’s highs losing momentum with intra-day charts showing a moderate upside path from the 1.2500 area. On the upside, however, 1.2600 will likely offer a significant resistance ahead of 1.2650.

Technical levels to watch