The Pound Sterling is making a recovery attempt

The Pound Sterling is making a recovery attempt following the release of a stubborn UK inflation report. In September, both headline and core inflation exceeded expectations, reaching 6.7% and 6.1% respectively. This unexpected inflation could raise concerns about the Bank of England's potential policy tightening in its November meeting.

The persistence of high Consumer Price Index (CPI) figures may cast doubt on UK Prime Minister Rishi Sunak's promise to reduce inflation to 5.5% by year-end, with potential consequences for the already struggling housing sector due to increased borrowing costs.

Market sentiment is currently risk-off as investors await US President Joe Biden's visit to Israel, which could further escalate Middle East tensions.

In the United States, despite strong Retail Sales data for September, the US Dollar Index remains stable near 106.00. Investors are also keeping an eye on Federal Reserve Chair Jerome Powell's upcoming speech to gauge potential changes in interest rate policy.

The reading continues to be the same for the GBP/USD as it entering an accumulation phase while awaiting a possible reversal. Next target if a breakout happens is at 1.2450 but before that taget the 1.2300 is the next resistance level.