GBP/USD fails to defend 1.3200 level ahead of UK CPI

A fresh wave of selling pressure seems to have emerged around the British Pound, with the GBP/USD pair breaking below 1.3200 handle just ahead of the UK inflation data.

Currently trading around Friday's closing level, the pair has now erased all of its gains recorded on Monday. The pair on Monday strengthened after SoftBank Group Corp. agreed to buy chip maker ARM Holdings Plc. 

The up-move, however, turned out to be short-lived and the pair weakened on expectations of further BOE easing, which might continue to weigh on the British Pound and restrict any swift recovery for the GBP/USD major. 

Next on tap is the release of UK CPI print, which is expected to show an uptick and rise to 0.4% in June. A surprisingly strong inflation number could prove supportive for the cable and the pair could extend its post-Brexit recovery. Traders will also confront the release of US housing market data, later during NA trading session, which could further fuel momentum during US trading session. 

Technical levels to watch

On a sustained weakness below 1.3200 handle the pair seems more likely to drop back towards 1.3120-1.3100 support area, which if broken might continue to exert selling pressure and drag the pair further below 1.3000 psychological mark support.

On the flip side, the pair needs to reclaim 1.3300 handle in order to increase the prospects of further recovery towards BOE-led swing high resistance near 1.3475-80 region with 1.3400 round figure mark acting as intermediate resistance.