GBP/USD Outlook: Downbeat Economic Data and Weakening Risk Mode Maintain Pressure on Sterling

Cable remains firmly in red for the third straight day and pressures pivotal support at 1.2250 (Fibo 76.4% of 1.2074/1.2813/Monday’s low, the lowest in one month).

Fresh weakness probes again into thick daily cloud after Monday’s dip failed to register daily close in the cloud.

Fading risk sentiment keeps sterling under pressure which increases on expectations of the UK re-opening the most of the economy and further spending on infrastructure that the government is preparing for.

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Weak economic data released today added to negative stance as the UK economy contracted 1.7% in Q1, more than 1.6% expected and UK current account deficit widened to 21.1 billion pounds, well above expected 15.6 billion gap.

Initial bearish signal could be expected on close within the cloud and confirmed on close below 1.2250 that would signal further weakness and expose support at 1.2161 (22 May trough). Solid supports at 1.2335 (22 June former low) and 1.2356 (broken Fibo 61.8% support) are expected to limit stronger upticks and keep bears in play.

Res: 1.2317; 1.2335; 1.2356; 1.2389
Sup: 1.2250; 1.2204; 1.2161; 1.2100