GBP/USD retreats post softer US data

The GBP/USD pair has fallen due to concerns of a potential US recession, with technical facors suggesting a neutral to downward bias. The pair has experienced a series of lower highs and lows, dragging the pair from year-to-date highs of 1.2894 toward current exchange rates. The daily moving averages (DMAs) are capping the pair’s downside at around 1.2600, which could pave the way for further downside.

The next support for the pair is the 200-DMA at 1.2560, followed by 1.2500 ahead of the May 9 cycle low of 1.2445. A breach of the latter will expose the YTD low of 1.2299. If buyers reclaim 1.2700, the next resistance would be 1.2750, and the next stop would be 1.2800 before challenging the June 12 high of 1.2868.

The market’s reaction to the data suggests that worries about a recession in the US loom as US equities tumbled and the US Dollar awaited US jobs data on Friday.