GBP/USD vulnerable to repricing ahead of UK data and BoE decision

GBP/USD faces potential volatility around the 1.2650 level as markets prepare for a series of high-impact UK economic releases and the Bank of England's policy decision on Thursday. The pair has been trading in a 1.2600-1.2700 range, with sterling's direction dependent on upcoming UK CPI, retail sales, and employment data. Current market pricing suggests a 15% probability of a BoE rate cut, but weaker-than-expected inflation data could significantly increase dovish bets. November's CPI is forecast to rise to 2.6% from 2.3%, while retail sales are expected to show modest growth. Technical indicators show GBP/USD testing the 50-day moving average at 1.2645, with support at 1.2580 and resistance at 1.2720. A break below support could accelerate declines toward 1.2500, while stronger UK data might push the pair back above 1.2700.