Institutional analysis: GBP/USD faces downside risks, investors focus on inflation report

GBP/USD could face downside risks this week despite the dollar’s strength, as leveraged traders increase their net-long positions.

If the UK inflation report on Aug. 16 shows tame inflation, that could prompt investors to flee.

Economists predict that the CPI annual rate will fall to 6.8%, which if confirmed, will be the first time since February 2022 that it will be below 7%.

Sterling bulls may need to see higher data before continuing to hold long positions.