The UK Consumer Price Index data in May was as dynamic as in the previous month, which is 0.4% or 2.4% on a yearly basis. The same situation applies to the base indicator, which maintained the value of 2.1% y/y. Both publications were exactly in line with market expectations.

The secondary inflation indicators of RPI and PPI are usually treated as secondary as they reflect trends in prices in retail trade and producer prices. The PPI Input data (a monthly survey that measures a change in input prices as incurred by UK manufacturers. Input prices include the cost of materials used plus operating costs of running the business) were released at the level of 2.8%, sharply higher than market expectations of 1.7% and better than the last month figure of 0.6%. On the yearly basis, the PPI Input prices rose from 5.6% to 9.2% already. The PPI Output data (a monthly survey that measures the price changes of goods produced by UK manufacturers. The figure is also known as "Factory Gate Price" because it usually matches the price of goods when they first leave the factory) were released at the same level as a month ago, that is 0.4%, a tad higher than the anticipated figure of 0.3%. On the yearly basis, the PPI Output prices rose from 2.6% to 2.9%.

Today's readings do not bring much new to expectations in relation to the probability of interest rate hikes in August. It is worth noting, however, that yesterday, consistent with consensus, information from the labor market helped the pound, today readings with similar characteristics were unable to do so. Until the August meeting, one set of monthly data has actually become one and the increase is estimated at 51%.

Let's now take a look at the GBP/USD technical picture at the H4 time frame. After the reading, the pair noted a temporary deepening of the morning slide towards the 61% Fibo at 1.3306, but it was quickly erased and the rate returns to 1.3340. There is a technical resistance at this level, so the bulls might be very active here if they want to keep the bounce valid. In a case of a successful breakout, the next target for bulls is seen at the level of 1.3369.