GBP/USD fell on Wednesday as rising geopolitical tensions offset the impact of a topside UK CPI surprise, though sterling's ability to hold gains against the euro indicated that the move in cable is more a function of the broad strength in the dollar.

That said, with the latest inflation figures, most notably services CPI matching the Bank of England’s projection, the read across for the policy outlook has been minimal, thus reinforcing the quarterly rate-cut script.

The escalation in Russia-Ukraine tensions has meant that currency markets have largely been playing headline ping-pong over the last two sessions, leading to skittish price action.
GBP/USD fell to session lows amid reports that Ukraine had fired UK missiles at targets inside Russia.
However, despite this, market moves have so far been fairly contained.

For GBP/USD, near-term supports resides at 1.26, where a break below leaves the pair vulnerable to a deeper setback towards 1.25.
On flip side, resistance sits at 1.27 and 1.2740 (200-hour MA).

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