GBP/USD Drops to Multi-Month Low on Weak UK Economic Data

GBP/USD dropped below the 1.2500 mark, hitting a new 6.5-month low on Friday, following disappointing UK retail sales for October and weak November PMI figures. These reports further pressured the pound, compounded by worsening geopolitical concerns over the potential escalation of the Ukraine conflict.

The strengthening dollar, driven by Trump trade optimism, alongside heightened safe-haven demand amid geopolitical uncertainty, has contributed to the negative near-term outlook for the British currency.

Cable is set for its eighth consecutive weekly loss and is on track to close the second straight month in the red, reinforcing signals of a potential reversal on larger timeframes (weekly and monthly).

Technical Outlook
The technical picture remains firmly bearish on the daily chart, with negative momentum strengthening. The 14-day momentum indicator continues to decline deeply in negative territory, and moving averages (5/200, 10/200, and 20/200 DMA crosses) signal a bearish setup.

However, the RSI has entered oversold territory, which could prompt profit-taking by the end of the week, potentially providing resistance to further downside and pushing the price higher.

Initial resistance is seen at the 1.2600 zone (today’s high, previous short consolidation lows, and the 100-week moving average), with further upside likely to face strong resistance around the 1.2700 level (falling 10DMA and psychological barrier), and the key breakpoint at 1.2818 (200DMA).

Res: 1.2600; 1.2624; 1.2680; 1.2700
Sup: 1.2487; 1.2445; 1.2400; 1.2299