The Pound Sterling (GBP) weakened against the US Dollar (USD) on Friday, trading at 1.2510, down 0.10%. This decline comes despite the release of positive economic data from the UK.
Stronger UK Data, Weaker Pound:
- The UK’s economic data, released earlier on Friday, exceeded expectations. However, the GBP/USD pair still dipped.
US Economic Concerns Weigh on GBP:
- Market anxieties regarding a sharper-than-anticipated slowdown in the US economy, fueled by declining consumer sentiment, are dampening the GBP’s momentum.
Technical Analysis: GBP/USD Faces Resistance
- The GBP/USD’s retreat towards 1.2500 presents an opportunity for sellers, who are eyeing lower prices.
- Failure to breach the key resistance level of the 200-day moving average (DMA) at 1.2541 indicates fading buying momentum.
- The bearish Relative Strength Index (RSI) further suggests potential downside.
Downside Risks:
- A break below the May 9th low of 1.2445 could trigger further selling pressure.
- Breaching this level could open the door to test the psychological 1.2400 level and potentially even the year-to-date low of 1.2299.
Upside Potential:
- If the GBP/USD manages to hold above 1.2500, buyers might attempt to retest the 200-DMA.
- Beyond that, the 50-DMA at 1.2594 and the 100-DMA at 1.2635 could act as further resistance levels.
The GBP/USD’s price action appears to be driven more by concerns about the US economy than by the UK’s data. The technical outlook suggests a potential downside bias if the price fails to hold above 1.2500.
