GBPUSD | Consolidation Above 1.35 – Breakout or Breakdown?Macro Hook:
Sterling turned higher after the BoE’s hawkish lean in early August. Since then, Cable has been driven by two forces: UK’s sticky inflation (slowing the BoE’s path to cutting rates) and softer US data (feeding expectations of Fed cuts and a weaker dollar). Yesterday’s softer US PPI hinted at easing price pressures upstream, and today’s Core CPI will decide whether that dovish Fed story holds or gets challenged.
Technical Lens:
The breakout from the descending channel created an impulse leg higher, and price is now consolidating in a corrective flag above the 1.35 handle. The 20/50 MAs remain supportive, showing trend momentum is still in play as long as 1.35 holds.
Scenarios:
If Core CPI comes in line or softer → USD stays pressured, Cable could break the corrective channel to the upside and continue its September climb.
If Core CPI surprises hot → Fed cut bets may be pared back, boosting USD and risking a Cable drop under 1.35 back toward old resistance/now support.
Catalysts:
US Core CPI today — sticky vs soft outcome will shape Fed cut pricing.
UK CPI mid-Sept — could confirm whether inflation remains sticky enough to delay BoE easing.
Fed FOMC later this month — tone and dot-plot guidance key for USD direction.
Takeaway:
1.35 is the decision point. Hold above, and the bullish impulse stays alive. Lose it, and the correction deepens — especially if US inflation surprises on the hot side.
