GBP/USD remains confined in a range, holds above mid-1.2400s ahead of US GDP

• GBP/USD lacks any firm intraday direction and seesaws between tepid gains/minor losses.
• A further rise in the US bond yields lends support to the USD and caps gains for the major.
• Rising bets for another 25 bps BoE rate hike in May continue to underpin the British Pound.

The GBP/USD pair struggles to gain any meaningful traction on Thursday and oscillates in a narrow trading band through the first half of the European session. The pair is currently placed just above mid-1.2400s, nearly unchanged for the day, though the downside seems cushioned amid subdued US Dollar (USD) price action.

The uncertainty over the Federal Reserve's rate-hike path, along with a slight recovery in the global risk sentiment, fail to assist the safe-haven buck to capitalize on the overnight bounce from a nearly two-week low and lend support to the GBP/USD pair.  Fresh concerns about banking contagion risks in the United States (US), along with the debt ceiling standoff and looming recession fears, have been fueling speculations about an imminent rate cut by the Fed later this year.

The markets, however, have been pricing in a greater chance of another 25 bps lift-off at the next FOMC policy meeting in May. This remains supportive of a further rise in the US Treasury bond yields, which acts as a tailwind for the Greenback and seems to cap the upside for the GBP/USD pair, at least for the time being. Moreover, the recent repeated failures to find acceptance above the 1.2500 psychological mark warrants some caution before positioning for any further gains.

Traders also seem reluctant and wait on the sidelines ahead of the release of the Advance US Q1 GDP report, due later during the early North American session. The data, along with the US bond yields and the broader risk sentiment, might influence the USD price dynamics and produce short-term trading opportunities around the GBP/USD pair. The market attention will then shift to the release of the Fed's preferred inflation gauge - the US Core PCE Price Index on Friday.

In the meantime, expectations for another 25 bps interest rate hike by the Bank of England (BoE) in May could underpin the British Pound and further contribute to liming the downside for the GBP/USD pair. The bets were lifted by last week's release of stronger UK wage growth data and consumer inflation figures, which, in turn, favours bullish traders and supports prospects for some meaningful near-term appreciating move for the major.

Technical levels to watch