GBPUSD remains stable at 1.2600 as traders await the US CPI

GBPUSD oscillates in a small trading zone for the second day in a row.

The GBPUSD pair extends its sideways consolidative price move for the second day in a row, being constrained in a small trading zone above the 1.2600 level. Through the first part of the European session on Wednesday.

A milder risk tone boosts the safe-haven USD while acting as a headwind for the pair.

A generally lower tone in the equity markets supports the safe-haven US Dollar (USD). Which is considered as a significant factor acting as a headwind for the GBPUSD pair. However, widespread consensus that the Federal Reserve (Fed) is nearing the conclusion of its year-long rate-hiking cycle is preventing USD bulls. From making strong wagers. Furthermore, markets have begun pricing in the probability that the US Federal Reserve. Would begin decreasing interest rates later this year.

The downside appears to be limited ahead of the US CPI on Wednesday and the Bank of England on Thursday.

In contrast, the Bank of England (BoE) is generally expected. to raise interest rates by 25 basis points on Thursday. Which continues to support the British Pound and limits the downside for the GBPUSD pair, at least for the time being. Traders appear hesitant to initiate aggressive bets and prefer to remain on the sidelines. Ahead of the big data/event risks, which include the publication of US consumer inflation statistics on Wednesday and the BoE meeting on Thursday.

The significant US CPI report will influence market expectations regarding the Fed’s next policy decision. Which should support USD demand in the short term. Aside from that, the highly anticipated BoE decision should assist investors in determining the next leg of the GBPUSD pair’s directional move. In Meanwhile, conflicting BoE-Fed forecasts may continue to operate as a tailwind for the major. Although bearish traders should exercise care.

Technically, the GBPUSD pair has been rising higher along a one-month ascending channel. This indicates a well-established short-term positive trend and boosts the GBPUSD pair’s prospects for additional near-term appreciation. As a result, any major corrective dip may still be viewed as a buying opportunity in the absence of any important market-moving data from the UK or the US.

GBPUSD Daily Trends