A Simple JRPG-style cursor script in Godot. To use, just set the menu_parent_path property in the editor to the container your menu options are stored in.

menu_cursor.gd

extends TextureRect

export var menu_parent_path : NodePath
export var cursor_offset : Vector2

onready var menu_parent := get_node(menu_parent_path)

var cursor_index : int = 0

func _process(delta):
	var input := Vector2.ZERO
	
	if Input.is_action_just_pressed("ui_up"):
		input.y -= 1
	if Input.is_action_just_pressed("ui_down"):
		input.y += 1
	if Input.is_action_just_pressed("ui_left"):
		input.x -= 1
	if Input.is_action_just_pressed("ui_right"):
		input.x += 1
	
	if menu_parent is VBoxContainer:
		set_cursor_from_index(cursor_index + input.y)
	elif menu_parent is HBoxContainer:
		set_cursor_from_index(cursor_index + input.x)
	elif menu_parent is GridContainer:
		set_cursor_from_index(cursor_index + input.x + input.y * menu_parent.columns)
	
	if Input.is_action_just_pressed("ui_select"):
		var current_menu_item := get_menu_item_at_index(cursor_index)
		
		if current_menu_item != null:
			if current_menu_item.has_method("cursor_select"):
				current_menu_item.cursor_select()

func get_menu_item_at_index(index : int) -> Control:
	if menu_parent == null:
		return null
	
	if index >= menu_parent.get_child_count() or index < 0:
		return null
	
	return menu_parent.get_child(index) as Control

func set_cursor_from_index(index : int) -> void:
	var menu_item := get_menu_item_at_index(index)
	
	if menu_item == null:
		return
	
	var position = menu_item.rect_global_position
	var size = menu_item.rect_size
	
	rect_global_position = Vector2(position.x, position.y + size.y / 2.0) - (rect_size / 2.0) - cursor_offset
	
	cursor_index = index

`extends TextureRect

@export var menu_parent_path : NodePath
@export var cursor_offset : Vector2

@onready var menu_parent := get_node(menu_parent_path)

var cursor_index : int = 0

func _process(delta):
var input := Vector2.ZERO
if Input.is_action_just_pressed("up"):
input.y -= 1
if Input.is_action_just_pressed("down"):
input.y += 1
if Input.is_action_just_pressed("right"):
input.x += 1
if Input.is_action_just_pressed("left"):
input.x -= 1

if menu_parent is VBoxContainer:
	set_cursor_from_index(cursor_index + input.y)
elif menu_parent is HBoxContainer:
	set_cursor_from_index(cursor_index + input.x)
	
if Input.is_action_just_pressed("ui_select"):
	var current_menu_item := get_menu_item_at_index(cursor_index)
	if current_menu_item != null:
		if current_menu_item.has_method("cursor_select"):
			current_menu_item.cursor_select()

func get_menu_item_at_index(index : int) -> Control:
if menu_parent == null:
return null
if index >= menu_parent.get_child_count() or index < 0:
return null
return menu_parent.get_child(index) as Control

func set_cursor_from_index(index : int) -> void:
var menu_item := get_menu_item_at_index(index)

if menu_item == null:
	return
	
var postion = menu_item.global_position
var menusize = menu_item.size

global_position = Vector2(position.x, postion.y + menusize.y) - (size / 2) - cursor_offset
print(globaL_position)
cursor_index = index`

Here is the script for the "Menu Cursor" Scene.

Here is a screenshot of the problem:

In this screenshot, the cursor should be appearing at the red circle, however its position is sent far off the camera. (Position Circled in red)

var menu_position = menu_item.global_position
var menu_size = menu_item.size

global_position = Vector2(menu_position.x, menu_position.y + (menu_size.y / 2.0)) - (size / 2.0) - cursor_offset

You need to change your position variable name since position is referencing the current position of your pointer which changes with every iteration of _process so it keeps moving away as the number gets bigger. At least, that's what was wrong with mine