GBP/USD consolidates near 1.3100 ahead of Fed and BoE decisions

GBP/USD is trading sideways around 1.3100, showing minimal movement as traders position cautiously before critical central bank decisions. The pair has entered a consolidation phase after last week's 0.5% decline, with markets awaiting clarity on monetary policy divergence between the Federal Reserve and Bank of England. The Fed is expected to begin its rate-cutting cycle at next week's meeting, with markets pricing in a 70% chance of a 25bps cut, while the BoE remains more hawkish due to persistent UK inflation above 2.5%. Technical indicators suggest range-bound trading between 1.3050 support and 1.3150 resistance. The upcoming US CPI data will be crucial for Fed expectations, while UK employment data could influence BoE's stance. A break above 1.3150 could target 1.3200, while failure to hold 1.3050 might accelerate declines toward 1.3000 psychological support.