• GBP/USD remains under some selling pressure on Friday, though lacks follow-through.
• The uncertainty over the Fed’s rate-cut path should cap the USD and offer support. 
• The mixed technical setup further warrants caution before placing directional bets.

The GBP/USD pair trades with a negative bias for the second straight day on Friday, albeit manages to hold its neck above the previous day's swing low. Spot prices currently hover around the mid-1.2700s and seem poised to register modest weekly gains amid subdued US Dollar (USD) price action. 

Against the backdrop of the Federal Reserve's (Fed) hawkish stance, the emergence of fresh selling around the Japanese Yen (JPY), triggered by the Bank of Japan's (BoJ) inaction, lends some support to the USD and weighs on the GBP/USD pair. That said, signs of easing inflationary pressures in the US keep hopes alive for a September Fed rate cut, which should cap the USD and act as a tailwind for the currency pair. 

From a technical perspective, the recent repeated failures to find acceptance above the 1.2800 mark and the subsequent downfall warrant caution for the GBP/USD bulls ahead of the UK national election on July 4. Meanwhile, mixed oscillators on the daily chart further make it prudent to wait for strong follow-through selling before confirming that the recent strong rally from the YTD trough touched in April has run its course.

Hence, any further decline is likely to find decent support near the 1.2755-1.2750 horizontal zone, below which the GBP/USD pair could slide to the 1.2715-1.2710 region. The downfall could extend further towards the 1.2690-1.2685 region en route to the 100-day Simple Moving Average (SMA), currently near the 1.2640-1.2635 area. A convincing break below the latter will mark a bearish breakdown and pave the way for deeper losses.

On the flip side, bulls need to wait for sustained strength and acceptance above the 1.2800 mark before positioning for a move back towards the 1.2860 area, or over a three-month high touched on Wednesday. A sustained strength beyond should allow the GBP/USD pair to surpass the YTD peak, around the 1.2900 neighborhood, and the 1.2950 resistance, towards reclaiming the 1.3000 psychological mark for the first time since July 2023