Forex - GBP/USD pares losses but remains under pressure

The pound pared losses against the U.S. dollar on Tuesday, after positive U.S. data but investors remained cautious ahead of Federal Reserve Chairman Ben Bernanke's testimony to Congress on Wednesday. 

GBP/USD pulled away from 1.5046, the session low, to hit 1.5099 during U.S. morning trade, still down 0.02%. 

Cable was likely to find support at 1.5028, Monday's low and resistance at 1.5189, the high of July 12. 

The Labor Department said U.S. consumer prices rose by a seasonally adjusted 0.5% in June, compared to expectations for a 0.3% increase, after rising by 0.1% in May. 

Year-over-year, consumer prices rose at an annualized rate of 1.8% last month, above expectations for a 1.7% gain and up from 1.4% in May. 

A separate report showed that U.S. industrial production rose 0.3% in June, less than the expected 0.2% gain, after a flat reading the previous month. 

But markets were jittery ahead of Bernanke's testimony on monetary policy amid speculation over the timing of a possible reduction to the bank’s USD85 billion-a-month bond buying program.

The greenback weakened last week after Bernanke said the U.S. economy still needed monetary stimulus. 

In the U.K., the Office for National Statistics earlier said consumer price inflation rose 2.9% from a year earlier in June, coming in below expectations for a 3.0% increase and up from 2.7% in May. 

The ONS said the increase in annual inflation was driven by higher prices for fuel, clothing and footwear.

Consumer inflation fell 0.2% on the month, compared to expectations for a 0.1% decline.

Core CPI, which excludes food, energy, alcohol, and tobacco costs rose to a seasonally adjusted 2.3% in June, in line with expectations and up from 2.2% in May. 

The retail price index rose 3.3% last month, slightly below expectations for a 3.4% increase. 

Sterling was lower against the euro with EUR/GBP climbing 0.53%, to hit 0.8695. 

Also Tuesday, data showed that the ZEW index of economic sentiment in Germany deteriorated unexpectedly in July.

The ZEW Centre for Economic Research said that its index of German economic sentiment fell to 36.3 in the current month from 38.5 in June. Analysts had expected a reading of 39.6.