The GBP/USD pair is down around 0.5% on the day after UK’s inflation fell to its lowest figure in over three years. This raised the hopes amongst traders for further interest rate cuts, weakening the cable as part of the initial reaction. However, we can see the pair finds itself at a key support level now, which may see some buyers stepping in ahead of the US retail sales data due tomorrow. Currently, the dollar trades at around $1.3010 against the pound with the pair also trading around the July high (resistance), September low (support), and now testing the 100-day moving average as well. The 100MA reads $1.2996 and the pair has actually dipped below this level earlier, reaching an intraday low $1.2982. But has since bounced back a little. As this is now the key support area in focus for the week, it would take a great amount of selling pressure to force the price much lower before any further data comes out from either the US or UK. Hence, the pair may experience some consolidation around the current price level with a possible rise to around $.13045-$1.3050 in the next 24 hours. Only a strong close below the 100MA would indicate that further downside is then likely to persist. In the scenario, traders could then shift their attention towards the support around $1.29 and maybe even $1.2850, which is where the 200MA would approximately come into the spotlight. Towards the upside, a break back above $1.3050 could shift the attention to the resistance of $1.3102. A move above $.13102 would not immediately suggest that another leg higher is underway as the 50MA (currently $1.3175) would likely act as tough resistance point in the near term. The technical indicators are clearly bearish, favouring the bears. However, the RSI is nearing oversold territory, which may increase the buying volume over the next couple of days.