The GBP/USD is currently positioned sideways and could remain trapped within a certain range until tomorrow's US inflation data or even until Friday's UK GDP report.
During these events, traders and investors may gain more insights into the future interest rates determined by the Bank of England (BoE).
Presently, the BoE maintains a somewhat hawkish stance, but if the GDP data reveals contraction and signals a potential recession, the BoE may need to revise its views.
In such a scenario, investors might speculate on a rate cut instead of anticipating "higher for longer" rates, leading to a potential decline in the pound against the USD.
Examining the Elliott wave pattern, there appears to be an ongoing triangle, possibly with wave E seeking support around the 1.2650 area.
However, for bullish sentiments to regain strength, the breaking of the wave D swing high is crucial. Additionally, deeper support and a more complex wave (4) could be found in the 1.25-1.2550 range.
If cable will break down and stay bearish after the economic data of US CPI and UK GDP will be released, then I would leave GBPUSD aside for time being, and rather focus on bearish GBPJPY.