The British pound edged lower against the US dollar in early London trading on Friday, with GBP/USD around 1.2700, down 0.2% on the day but still up roughly 0.4% for the week. Sterling has held its gains as UK inflation remains above the Bank of England’s 2% target, reinforcing expectations that interest rates may stay higher for longer and that rate cuts will be delayed. By contrast, the Federal Reserve has indicated potential easing later this year, creating a policy divergence that favors the pound. Traders see support near 1.2650, with stronger support around 1.2600, while resistance is located at 1.2800 and then 1.2900. The pair appears to be consolidating after a strong rally earlier in the month, while the Relative Strength Index, a momentum indicator, has cooled from overbought levels. Upcoming UK GDP and retail sales data could influence expectations for Bank of England policy and determine the next move in sterling.