GBP/USD Falls Towards 1.2500 While Risk-Off Momentum Goes On

Bulls are Maintaining a Fair Path

The GBP/USD currency pair is falling lower following its failure to maintain its stand above 1.2540. It was a slightly gloomy time in the Asian session. Bulls on the green line are pulling the pair towards the 1.2500 psychological support.

The 1.2500 psychological support level is next since poor market sentiments cut investors’ risk appetite. On a general note, the cable pair is oscillating between the 1.2430 to 1.2600 range. This has been the dominant event over the last two weeks.


GBP/USD price chart. Source TradingView

There is much instability in the foreign exchange sector.  But despite that, investors now focus on inflation in the US and the coming report scheduled for Friday. The yearly consumer price index is speculated to be the same as always at 8.3%.

Meanwhile, the central consumer price index which does not include energy and food cost is speculated to drop. It is expected at 5.95 against the last figure of 6.2%. The rate of difference in the consumer price index will have a significant ramification.

The implication will be felt in the decision of the Federal Reserve via interest rates. The high report from the Nonfarm Payroll published in the past week has its effects. It now increased the odds of a huge rate increase by the Federal Reserve.

The US employment process efficiency has given more room for the Federal Reserve to extend the rates. The higher price pressure in the market will force the Feds to increase rates. Increasing pressures from inflation will reduce the household incomes in the United States.

UK Low Growth Continues

In the UK, on the other hand, reduced growth predictions are a major source of concern to bulls. Increasing inflation also has the same effect on the entire British market.

According to the British Chamber of Commerce, the economic growth of the UK is coming to a halt. The economy is not also expected to show any sign of expansion in the GDP.


The GBP/USD was pressured in the direction of the intraday low point close to 1.2520 while bears kept their rein. The pair thus prolongs its loss while the bullish bias declined.

The same factor also kept sellers on the path of losses and it failed to cross downward. Nevertheless, the pair sellers require a confirmation from its 21-period DMA to be back in control.

After that, the 23.6% Fib level of the downturn in April-May will be before 1.2330 and 1.2260 levels. It will, thus, pose a challenge to bears of the GBP/USD before going for the annual low at 1.2155.