• GBP/USD has dropped sharply to near 1.2480 amid a recovery move by the USD Index and the risk-off market mood.
• Investors are shifting their focus on interest rate guidance from the Federal Reserve as a 25bp rate hike is widely anticipated.
• The street is anticipating one more 25 bps rate hike from the Bank of England to continue pressure on UK’s stubborn inflation.
• GBP/USD has been consolidating in a wide range of 1.2347-1.2545 for the past three weeks.

The GBP/USD pair has dropped after failing to sustain above the psychological resistance of 1.2500 in the early European session. The Cable has sensed selling pressure as the US Dollar Index (DXY) is aiming to extend its recovery above 101.33 also negative market sentiment is weighing on risk-sensitive assets.

The USD Index rebounded sharply from 101.20 as investors are getting anxious ahead of the release of the United States Gross Domestic Product (GDP) data, which will release on Thursday. Also, investors are anticipating that the sticky US core Consumer Price Index (CPI) could force the Federal Reserve (Fed) to remain hawkish on interest rate guidance.

Meanwhile, S&P500 futures are consistently adding losses in the overnight session as the street is worried over quarterly results from giant technology stocks. The week is going to be pretty busy as three FAANG stocks will report their quarterly results. Meta Platforms (Facebook), Amazon, and Google. Also, Microsoft will come forward with quarterly earnings and revenue guidance.