GBP/USD bulls take a breather below 1.2500 as US Q1 GDP looms

• GBP/USD takes offers to pare the biggest daily gain in three weeks, prints minor losses of late.
• Mixed sentiment, concerns about US default and mostly upbeat US data allow Cable to retreat.
• US Dollar struggles for clear direction amid cautious mood ahead of US Q1 GDP, dicey market elsewhere.

GBP/USD struggles to defend the previous day’s gains, the heaviest in three weeks, as the US Dollar buyers turn cautious ahead of the key US Q1 GDP. That said, the Pound Sterling remains mildly offered around 1.2465 amid early Thursday.

Markets turn dicey as traders take a breather after a volatile day, especially amid mixed updates and a cautious mood before important US growth data.

Talking about the key risk catalysts, the US House of Representatives passes a bill that enables the government to negotiate the extension of the debt ceiling. However, the policymakers are likely to remain at loggerheads amid the wide difference between the Republicans' and Democrats’ demands. On the same line, the latest tax receipt numbers from the US allow Goldman Sachs (GS) to expect that the US Treasury Department can avoid the risk of a federal payments default till late July.

On a different page, the UK policymakers criticize the passages of the illegal migration bill, as well as the Tory government’s Brexit move. Additionally challenging the GBP/USD pair could be the political turmoil challenging UK Prime Minister (PM) Rishi Sunak on an ethical basis.

It’s worth noting that mixed US data and equity market performance also trouble the GBP/USD pair as the US Durable Goods Orders rose but the details of Consumer Confidence eased. Furthermore, the tech giants allowed Nasdaq to remain firmer but the escalating fears from the First Republic Bank (FRB), due to another 20% share price fall on Wednesday following a 50% slump the previous day weigh on the sentiment.

Amid these plays, US Treasury bond yields remain directionless while the S&P 500 Futures print mild gains of 0.20% around 4,083 by the press time, following a mixed close of Wall Street.

Moving on, GBP/USD may witness further grinding as markets turn dicey ahead of the key US first quarter (Q1) Gross Domestic Product (GDP), expected to ease to 2.0% on an annualized basis versus 2.6% prior. However, the Cable buyers are likely running out of steam and hence any positive surprise from the US data can allow the bears to sneak in.

Technical analysis

A three-week-old bearish triangle formation, currently between 1.2525 and 1.2415, keeps the GBP/USD sellers hopeful.