Global macro overview for 15/08/2017:

The Consumer Price Index data from the UK are scheduled for release at 08:30 am GMT and market participants expect no change in inflationary pressures on a monthly basis (0.0% vs. 0.0% prior) and a little change to the upside on a yearly basis ( 2.7% vs. 2.6% prior).

After trending higher in last eight months, the inflation eased a little in June this year. Nevertheless, the overall trend still looks positive and still points to the upside. The recent CPI reading of 2.9% in May is higher than anticipated 2.7% figure, but a firmer number will refocus attention on this year's rebound in inflation. Moreover, it is worth to notice that a year ago, in August 2016, CPI posted a weak 0.6% rise. The key for a hotter inflation reading in the UK is in the food prices which came to a fairly abrupt end in the aftermath of the Brexit vote. The Bank of England recently increased the inflation target for this year up to the level of 3.0%, which is well above the 2.0% target from the beginning of the year. Nevertheless, it is still unclear whether the rising inflationary pressures will trigger the interest rate hike cycle due to the fact that the main reason for the recent jump in inflationary pressures is attributed to weaker currency levels after the last year's Brexit referendum vote. The pressure on the pound sterling is still high and any disappointing numbers from today's data might cause the pound sell-off across the board.

Let's now take a look at the GBP/USD technical picture on the H4 time frame. The market is already trading close to the consolidation area at the technical support level of 1.2932, so worse than expected data might extend the move lower towards the next technical support at the level of 1.2861. The inability of the momentum indicator to move above the fifty level supports the short-term bearish bias.