Ella 
GBP/USD struggled to gain significantly in Asia on Wednesday, trading in a narrow range around the 1.2700 round mark. Meanwhile, GBP/USD remained above the one-month low hit on Friday as traders awaited the latest UK consumer inflation data before positioning for the next directional move.
The UK headline consumer price index is expected to rise to 0.4% in May, from 0.3% in the previous month, while the annual inflation rate will fall to 3.5% from 3.9% in April. The UK consumer price index will have a key impact on the British pound (GBP) and provide some momentum for GBP/USD. The focus will then turn to Thursday’s Bank of England (BOE) monetary policy meeting, which will help determine the near-term direction of GBP/USD.
The sluggish US dollar (USD) price action has been a boost to GBP/USD ahead of key data/central bank event risk. The US retail sales report released on Tuesday was weaker than expected, showing signs of consumer fatigue and reaffirming expectations that the Federal Reserve (Fed) may initiate rate cuts in September. This led to a drop in US Treasury yields overnight and weighed on the dollar.
The above fundamental backdrop supports the prospect of a clear upside move in the GBP/USD pair. Nevertheless, investors should be cautious before establishing a position for the recent extended rebound from around 1.2600 (a one-month low hit last Friday) due to the lack of follow-through buying.
