GBP/USD bears are holding up the bullish correction below 1.2050

GBP/USD is back under pressure in midday US trade after a series of data has kept a lid on attempts to correct the major sell-off that ensued following a round of negative data for cable. At the time of writing, GBP/USD is trading at 1.2005 and down 1.35%, pressured within the day's range of between 1.1989 and 1.2181, retreating from near two-week lows and on course for its sharpest one-day decline this month.

The pair has moved lower to break a seven-day rally against the euro, after a bigger-than-expected drop in UK inflation in January has led investors to believe that the Bank of England might curtail its interest rate hiking cycle. Inflation decelerated to an annual rate of 10.1% in January from 10.5% in December, compared to expectations of 10.3% in a Wall Street Journal survey of analysts.

Then to rub salt in the bull's wounds, the US Dollar climbed to a six-week high against a currency basket on Wednesday after hotter-than-expected US Retail Sales data last month that followed high Consumer Price Index data the prior day. Year-on-year, Retail Sales prices rose 6.4%. That was down from 6.5% in December but above economists' expectations of 6.2%Retail Sales rose 3% in January, easily topping the 1.8% estimate, the Commerce Department reported Wednesday.

''Today’s US Retail Sales data release support risks that the Federal Reserve will have to work harder to curtail demand and bring inflation under control,'' analysts at Rabobank said. 

Investors are starting to have second thoughts as to whether there will be cuts in 2023. Rates currently stand at 4.5% to 4.75% but Fed board members' median projection foresaw interest rates peaking at 5.1% this year. However, interest rate futures markets have still priced a peak above 5.2%, based on late Tuesday's prices.