Today, the GBP/USD pair is attempting to regain positive momentum while remaining on the defensive. Traders prefer to wait for the release of key data before opening directional positions.

The latest UK consumer inflation figures are scheduled for release on Wednesday, just ahead of the Bank of England's meeting on Thursday. This event will play a crucial role in shaping the direction of the British pound, as the inflation data could influence expectations regarding monetary policy and, consequently, the GBP/USD exchange rate.

Additionally, the U.S. Federal Reserve's interest rate decision is expected on Wednesday, which will significantly impact the U.S. dollar. These events may serve as major catalysts for the GBP/USD pair's movement, helping determine its short-term trajectory. Traders should closely monitor these releases to adjust their positions according to the new data and market expectations.

The weaker-than-expected UK GDP reading published on Friday showed a 0.3% economic contraction in April — more than anticipated. This result has heightened expectations that the Bank of England may adopt a more aggressive rate-cutting stance in the near future.

At the same time, the U.S. dollar is receiving support from global demand for safe-haven assets, driven by escalating geopolitical tensions in the Middle East. This factor is limiting the upside potential for GBP/USD, as investors seek shelter in more reliable assets, strengthening the dollar and capping gains in the pound against the greenback.

Nonetheless, expectations that the Federal Reserve may resume its rate-cutting cycle as early as September — due to signs of easing inflation in the U.S. — are restraining bullish sentiment on the dollar, preventing it from posting strong gains.

In addition, the generally positive risk sentiment in global markets acts as a limiting factor on safe-haven demand for the dollar. This provides some support for the GBP/USD pair.

From a technical perspective, as long as oscillators on the daily chart remain in positive territory and far from overbought levels, the path of least resistance for the pair continues to be upward.