GBP Faces Selling Pressure Following Concerns of UK Economic Slowdown and Rising Cost

The British Pound (GBP) is encountering selling pressure attributed to concerns surrounding a UK economic slowdown driven by the Bank of England's (BoE) tightening monetary policy. The GBP/USD pair, previously on an uptrend, now hovers around 1.2330 without robust support for the Pound.

The recent resurgence in the GBP/USD pair was fueled by improved market sentiment, stemming from expectations of a pause in interest rate hikes by the Federal Reserve (Fed) and reduced tensions in the Middle East. Nevertheless, the UK economy faces the risk of recession, with sectors like manufacturing, services, and housing struggling to adapt to higher BoE interest rates. The already weak consumer spending is poised to worsen due to escalating living costs.

A survey conducted by Accenture and YouGov revealed that a significant portion of UK adults, approximately two-thirds, are disinterested in partaking in Black Friday, Cyber Monday, or Boxing Day discounts due to the ongoing cost of living crisis. According to S&P Global's report, all sectors, including manufacturing, services, and construction, continue to languish below the 50.0 threshold, indicating ongoing economic challenges.

On the 1D chart, GBPUSD is in a corrective phase after touching the 200MA. The first support is at 1.2300 followed by 1.2260. A breakout of the 200MA would take the price to the next target of 1.2600.

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1.2600	1.2550	1.2450	1.2300	1.2260	1.2200