Ella 
GBP/USD attracted some bargain hunting during the Asian session on Tuesday and climbed to new intraday highs around 1.2775-1.2780 in the past hour. However, spot prices remained confined to the previous day’s wider trading range, as traders eagerly awaited important macro data from the UK and US before making new directional bets.
The UK monthly employment report and US producer price index (PPI) are due later today, followed by the latest UK and US consumer inflation data on Wednesday. These data, along with the preliminary UK second-quarter gross domestic product (GDP) released on Thursday, will have a key impact on the trend of sterling (GBP) and provide new directional impetus for sterling against the dollar.
Meanwhile, expectations that the Bank of England (BOE) will cut borrowing costs twice more this year after cutting interest rates for the first time since 2020 on August 1 may continue to weaken the pound. On the other hand, the U.S. dollar (USD) has struggled to attract meaningful buyers as bets on the Federal Reserve (Fed) ramping up interest rate cuts continue to heat up. Therefore, caution should be exercised before going long GBP/USD.
From a technical perspective, spot prices showed some resilience last week below the 100-day simple moving average (SMA) and staged a nice recovery from the $1.2665 area, or over-month lows. This coupled with the fact that oscillators on the daily chart have turned neutral supports the prospects of further appreciation for the pair. Nonetheless, continued strength beyond the 1.2800 mark is needed to confirm the positive outlook.
