GBP/USD bears are moving in as the US Dollar picks up steam

• GBP/USD bulls are struggling in the wake of a US Dollar comeback. 
• All eyes now turn to the BoE after the US CPI event on Wednesday. 

GBP/USD is flat on the day after a turbulent time with the pair trading between a low of 1.2602 and a high of 1.2679. The volatility has been sparked by the US Consumer Price Index, CPI, in the New York open.

Headline CPI growth in the US ended lower to 4.9% in April from 5% in March. 'Core' inflation excluding food and energy products also moderated, to 5.5% from 5.6% in March.

´´Inflation trends in the US continue to head the right direction, but still have a long way to go before they reach the Fed's 2% target. Labour market conditions still look strong, but are showing cracks under the surface, and tension remains among regional banking credit markets,´´ analysts at RBC Economics said.

´´Increasingly, we expect the Federal Reserve will have to balance risks between sticky inflation, and slowing growth momentum / tighter financial conditions. We continue to expect the move last week to be the last one this cycle, leaving the Fed on hold until later this year.´´

Consequently, the US dollar has found a bid after the initial sell-off and this is weighing on GBP/USD in late trade in the New York session. Meanwhile, eyes will now turn to 

Meanwhile, we have the next key event for GBP with the Bank of England. ´´We expect another 25bps hike in Bank Rate to 4.50%, with guidance left unchanged, meaning that the MPC will hike rates again should data justify it,´´ analysts at TD Securities said. 

´´We think it will, and expect one final 25bps hike in June to a terminal of 4.75%.´´

´´Much will hinge on the US CPI report in the near-term, but keep in mind that GBP has a propensity sell-off on BoE meetings since they started to hike last year,´´ the analysts explained.