**GBP/USD Continues the Run to the Downside**
*Original article authored by Justin Low for ForexLive / TradingView News*
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The GBP/USD currency pair has been experiencing a sustained move to the downside, breaking successive support levels and signaling ongoing bearish pressure in the FX markets. Persistent dollar strength, combined with lackluster UK economic data and shifting Bank of England (BOE) rate expectations, have all contributed to the currency pair’s slide, leading traders and analysts to reevaluate potential targets and risk exposures over both the short and medium-term horizons.
### Recent Price Action
The GBP/USD pair opened the week on shaky ground, struggling to maintain support around the 1.2690 region, which had held up for much of late May and early June as a key psychological and technical level. Once that floor gave way, the selling intensified, with price action cascading swiftly below subsequent support zones, and opening the door to further downside.
By the morning of June 13, 2024, GBP/USD had fallen below 1.2650, testing lows not seen in several weeks. The move lower comes as part of a broader risk-off environment, with the US dollar benefiting from safe haven flows and higher expectations around monetary policy divergence between the Federal Reserve and other major central banks.
### Contributing Factors to GBP/USD Weakness
Several macroeconomic and market-specific factors have contributed to the recent sell-off in GBP/USD:
– **Dollar Strength**
– The US dollar index (DXY) has remained firm as US economic activity, especially labor market indicators and core inflation readings, beat consensus expectations.
– Safe haven flows amid global risk aversion (driven by geopolitics and growth concerns) have further strengthened the dollar’s hand relative to its G10 peers.
– **UK Economic Concerns**
– Recent UK GDP data has pointed to below-trend growth, raising concerns about the sustainability of the UK recovery.
– Business sentiment indicators and Purchasing Managers’ Index (PMI) readings for services and manufacturing continue to hover near stagnation, with little sign of imminent turnaround.
– **Bank of England Rate Path**
– Although sticky inflation forced the BOE to maintain a hawkish stance earlier in 2024, recent data releases have reduced expectations for further rate hikes.
– Rising speculation over rate cuts later in 2024 has made the pound less attractive to carry traders and investors seeking yield.
– **Political Uncertainty**
– The upcoming UK general election has injected additional uncertainty into the market, with traders wary of any policy shifts following the ballot, particularly those that may impact fiscal spending or investor confidence.
### Technical Analysis
From a technical standpoint, the recent break below the 1.2690–1.2700 support area is significant:
– **Key Support Levels**
– 1.2690–1.2700 (recently broken, now acting as resistance)
– 1.264
Read more on GBP/USD trading.