- GBP/USD meets with a fresh supply on Wednesday, though the downside seems cushioned.
- A bleak outlook for the UK economy undermines the GBP and acts as a headwind for the pair.
- A combination of factors keeps the USD bulls on the defensive and could lend some support.
The GBP/USD pair struggles to capitalize on its modest intraday uptick and attracts some sellers near the 1.2175-1.2180 region on Wednesday. Spot prices slide back below mid-1.2100s during the first half of the European session, though remain well within the previous day’s broader trading range.
The USD is weighed down by growing acceptance that the Fed will soften its hawkish stance, bolstered by last week’s softer US macro data. In fact, the US NFP report showed a slowdown in the US wage growth in December and pointed to signs of easing inflationary pressures. Furthermore, business activity in the US services sector hit the worst level since 2009 during December.
Technical levels to watch