GBP/USD Continues Downward Spiral: What's Behind the Persistent Weakness?How to build a Monero mining rig
The British pound continues its losing streak against the US dollar, marking three consecutive days of declines as market participants digest renewed trade tensions and prepare for crucial central bank commentary. The currency pair slipped below the psychologically significant 1.2400 level during Monday's session, erasing approximately 0.33% of its value.
Trade War Fears Resurface
Market sentiment received another blow as fresh protectionist measures emerged from Washington. The latest policy move threatens to reignite global trade tensions, creating headwinds for risk-sensitive currencies like sterling. These developments come at a delicate time for currency markets already grappling with shifting monetary policy expectations.
Central Bank Watch: Bailey and Powell in Focus
All eyes turn to Bank of England Governor Andrew Bailey's scheduled address on Tuesday. Market participants will scrutinize his remarks for clues about future policy direction following last week's rate decision. Across the Atlantic, Federal Reserve Chair Jerome Powell prepares to deliver testimony before Senate lawmakers, potentially offering insights into the US central bank's thinking amid evolving economic conditions.
Critical Economic Data Ahead
The week's economic calendar features several high-impact releases that could determine near-term direction for the currency pair. Wednesday brings the latest US inflation figures, while Thursday serves up dual releases of UK GDP data and US producer price indices. These indicators will provide fresh evidence about the relative economic strength of both nations.
Technical Perspective: Bears Regain Control
From a chart perspective, the pair shows signs of exhaustion after its recovery attempt from January lows near 1.2100. Price action has twice failed to overcome resistance near the 50-day moving average around 1.2500, suggesting the bears maintain control. Current momentum indicators point toward potential further declines, with the 1.2300 level emerging as the next significant support zone.
The combination of fundamental headwinds and deteriorating technical posture creates a challenging environment for sterling bulls. Market participants should prepare for potential volatility as these competing factors play out in the days ahead.
