UK headline Consumer Price Index accelerated 9.4% in June year-over-year, from 9.1% in the prior month, as today's data showed. This figure marked another four-decades high, aggravating fears around the cost of living and putting more pressure on the Bank of England to act more aggressively.
The BoE started its rate hiking cycle at the end of last year, way ahead of the US Fed, but has been constrained to no-bigger than 0.25% moves, a strategy that does not seem to be effective in fighting surging inflation.
At the last meeting June, a minority of three officials had dissented in a favor of a bolder 50 basis points adjustment, something that will be "among the choices on the table" at the upcoming meeting next month. This according to Wednesday's comments from Governor Bailey, who warned however that such an 0.5% hike is "not locked in". 
The US Federal Reserve has guided towards a 50-75 basis points rate increase next week and markets seems to be in-line with this, as Fed officials poured cold water on bets for bigger 1% move following last week's hot US CPI inflation.
This cooling down of expectation around the Fed's next move and better market sentiment have allowed GBP/USD to a recovery from its 2+ year lows since Friday, gaining more than 1% during the current week.
It now has the critical 1.2100-40 area and the EMA200 in its eyesight and daily closes above it can pause medium-term downside bias and give it the chance for a larger recovery. However, the daily Ichimoku Cloud has the ability to quash such efforts and we remain cautious around the pair's ascending prospects.
Despite the recent rebound, below the EMA200, bears are in control and we can see a breach of 1.1904, although fresh lows towards 1.1681 don't look easy for now.
Senior Market Specialist
Nikos Tzabouras is a graduate of the Department of International & European Economic Studies at the Athens University of Economics and Business. He has a long time presence at FXCM, as he joined the company in 2011. He has served from multiple positions, but specializes in financial market analysis and commentary.
With his educational background in international relations, he emphasizes not only on Technical Analysis but also in Fundamental Analysis and Geopolitics – which have been having increasing impact on financial markets. He has longtime experience in market analysis and as a host of educational trading courses via online and in-person sessions and conferences.