The cost of living in the UK as represented by the Consumer Price Index (CPI) for November month is due early on Wednesday at 07:00 GMT. The key inflation data will join the current Brexit drama, the coronavirus (COVID-19) vaccine headlines and the US covid stimulus updates to entertain the Pound traders. The price economics gain more importance ahead of Thursday’s Bank of England meeting.

The headline CPI inflation is expected to ease from 0.7% prior to 0.6% on an annual basis. The Core CPI that excludes volatile food and energy items is also likely to recede from 1.5% to 1.4% YoY. Talking about the monthly figures, the CPI bears the upbeat consensus of +0.1% versus +0.0% prior.

According to a tweet by MNI’s Anthony Barton, the investment banking giant Morgan Stanley believes the UK and European Union (EU) have moved closer to a Canada-style Brexit trade deal. “The recent Brexit-related news flow suggests that Britain and the European Union have found a way forward on the level playing field (LPF). We again confidently expect a Canada-style deal, and see just a 20% chance of the talks breaking down & a WTO outcome,” Morgan Stanley said.

US Senate Majority Leader Mitch McConnell joins House Speaker Nancy Pelosi and Treasury Secretary Steve Mnuchin to discuss the much-awaited US aid package. Recent updates suggest that the policymakers are closer to a deal after only two issues left pending for the finalization during the previous talks.

On the other hand, Ireland’s new Taoiseach (Irish Prime Minister) Micheal Martin recently suggested that further clarity over the Brexit deal is expected by the weekend. It should, however, be noted that the Daily Telegraph Reporter Harry Yorke tweeted that he was told Boris Johnson has sent a message of reassurance to the ERG this evening: “Never fear folks we will vindicate the people in full or else as I have said many times we will start the new year World Trade Organizations (WTO) terms!”

GBP/USD 4 Hour Chart:

Support: 1.3341 (S1), 1.3216 (S2), 1.3152 (S3).

Resistance: 1.3530 (R1), 1.3595 (R2), 1.3720 (R3).

If today’s UK CPI manage to beat the market consensus on a positive side then it will immediate strength to GBP/USD. We expect a bullish trend for GBP/USD.