GBP/USD directionless above 1.30 as

Despite some minor fluctuations on Wednesday, the GBP/USD pair is trading in a tight 40-pip range and is having a rough time finding its next direction. As of writing, the pair is trading at 1.3035, losing only 5 pips on the day.

Although today's data from the United States came above the market expectations, investors remain skeptical about the greenback's future. Following yesterday's sharp drop, the US Dollar Index stays relatively calm on Wednesday, moving sideways around mid-95s, where it finished the previous day.

According to the data released by the US Census Bureau, privately-owned housing starts increased by 8.3% on a monthly basis in June after contracting by 5.5% in May while building permits advanced by 7.4%, beating the market consensus of 2.8%. Earlier in the day, mortgage applications released by the MBA also showed that, on a weekly basis, they jumped by 6.3%. Nevertheless, these data were not significant enough to attract the participants back to the greenback. 

• US: Housing starts in June were at a seasonally adjusted annual rate of 1,215,000

On the other hand, the uncertainty surrounding the next policy move by the BoE makes it difficult for the cable to set a near-term course. Although markets seemed convinced that the BoE was going for a hawkish policy change, yesterday's weak inflation readings from the U.K. brought some confusion.

• UK: Pound is undervalued against USD – Lloyds Bank

There are no data left from the U.S. in the remainder of the session, and the next catalyst could come tomorrow when the retail sales numbers are released from the U.K. However, any reaction by the EUR/GBP to the ECB meeting could impact the GBP/USD pair's price action as well.

Technical analysis

Short-term technical indicators for the pair reflect the neutral outlook as well with the RSI on the H4 chart moving sideways near the 50 handle. 1.3000 (psychological level) could be seen as the initial support for the pair ahead of 1.2930 (Fib. 23.6% retracement of 21 - 30 June upsurge) and 1.2865 (50-DMA). On the upside, resistances align at 1.3120 (Jul. 18 high), 1.3185 (Aug. 18, 2016, high) and 1.3250 (Sept. 16 high).

• GBP/USD could grind lower to 1.2885 – Commerzbank