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GBP/USD: Sterling Falters Despite Upbeat UK Data

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.