GBP/USD consolidates below one-year top, looks to UK CPI for fresh directional impetus

• GBP/USD remains confined in a familiar range held since the beginning of this week.
• September Fed rate cut bets continue to undermine the USD and lend some support.
• Diminishing bets for the August BoE rate cut favor bulls ahead of the UK CPI report.

The GBP/USD pair extends its sideways consolidative price move for the third successive day on Wednesday and trades around the 1.2970 region during the Asian session. Spot prices, meanwhile, remain well within the striking distance of a one-year peak touched on Monday and the fundamental backdrop supports prospects for an extension of a two-week-old uptrend. 

The US Dollar (USD) draws some support from the upbeat US Retail Sales data released on Tuesday, which pointed to consumer resilience and bolstered economic growth prospects for the second quarter. This, in turn, is seen as a key factor acting as a headwind for the GBP/USD pair as traders keenly await the crucial UK consumer inflation figures before positioning for the next leg of a directional move. 

The headline UK CPI is expected to come in at 0.1% for June as compared to 0.3% in the previous month, while the yearly rate is anticipated to hold steady at 2.0% YoY. Heading into the key data risk, diminishing odds of a rate cut by the Bank of England (BoE) in August, especially after Britain's economy grew more quickly than expected in May, continues to lend some support to the British Pound (GBP) and the GBP/USD pair. 

Meanwhile, the markets are now pricing in over a 90% chance that the Federal Reserve (Fed) will lower borrowing costs in September, which keeps the US Treasury bond yields depressed near a multi-month low and should cap the USD. This, in turn, validates the near-term positive outlook for the GBP/USD pair, suggesting that any immediate market reaction to the softer UK CPI report is more likely to be limited.