**GBP/USD Price Forecast: Sterling Slides for Sixth Consecutive Day**
*By TradingNews.com*
The British pound (GBP) continues to face significant downward pressure against the US dollar (USD), with the GBP/USD pair extending its losing streak to six consecutive days. Amid mounting economic and political uncertainties in the United Kingdom, as well as persistent strength in the US dollar, traders remain cautious regarding the outlook for the sterling. The following article provides an in-depth analysis of the current market dynamics, key drivers affecting the GBP/USD, technical perspectives, and expert commentary on what may lie ahead for the currency pair.
**Market Overview**
On the sixth straight day of declines, GBP/USD was last seen trading near its lowest levels since early May, unable to find solid footing despite periodic attempts at recovery. The pound has lost ground due to a combination of domestic economic woes, mixed employment data, worrisome inflation trends, and increased risk aversion globally. In contrast, the US dollar has benefited from its safe-haven appeal, the Federal Reserve’s hawkish stance, and robust recent macroeconomic releases.
**Key Drivers Behind Sterling’s Weakness**
Several overlapping factors have contributed to the sustained downward move in GBP/USD. These include:
– **Disappointing Economic Data from the UK:**
Recent economic releases in the United Kingdom have thrown cold water on expectations for a near-term rebound. The UK economy showed only sluggish growth in recent months, with GDP data missing forecasts and suggesting limited momentum during the critical spring period.
– **Persistently High Inflation:**
Although inflation in the UK has eased from multidecade highs, it remains above the Bank of England’s (BoE) target. This persistent price pressure has weighed on consumer spending and business confidence, creating a challenging backdrop for policy decisions.
– **BoE Policy Uncertainty:**
Markets are increasingly cautious about when, and by how much, the Bank of England will move to cut rates in response to sluggish growth. Recent speeches from BoE policymakers have failed to offer clarity, with contrasting opinions fueling uncertainty. While some members favor holding rates steady to combat inflation, others note the drag from restrictive financial conditions.
– **Political Instability and General Election Risk:**
The approaching UK general election and ongoing Brexit-related issues have heightened political uncertainties. Markets are wary of potential changes in fiscal and economic policy depending on the outcome, leading to capital outflows and a reluctance to hold sterling assets.
– **US Dollar Strength:**
The US dollar remains resilient on the back of solid economic data, including strong non-farm payrolls, resilient consumer spending, and inflation readings that support the case for the Federal Reserve to keep rates higher for longer. Fed officials have reaffirmed their commitment to data-dependence, but most market participants forecast only gradual easing, further supporting the dollar’s bid.
**Technical Analysis: Key Levels to Watch**
A closer examination of the GBP/USD daily chart reveals the following technical dynamics:
– **Downtrend Confirmation:**
The pair’s consistent lower highs and lower lows on the daily timeframe confirm the prevailing bearish trend. The six-day decline punctuates the strength of selling pressure.
– **Support Zones:**
The immediate support level is observed near the 1.2650 handle, with further downside risk toward the May lows around 1.2590. If this zone fails to hold, the next target could be 1.2500, a psychologically significant round number and a historically relevant pivot.
– **Resistance Points:**
On the upside, corrective bounces may encounter resistance at the 1.2730 region, formerly a support level now turned resistance. Beyond this, the 1.2800 level is likely to cap rallies unless there is a significant shift in sentiment.
– **Oscillator Readings:**
Both the Relative Strength Index (RSI) and the Moving Average Convergence Divergence (MACD) are positioned in bearish territory, though initial signs
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