GBP/USD tumbles through 1.27 on Thursday

• GBP/USD backslid yet again on Thursday, falling to a 19-week low.
• Cable is on pace for its single worst week since mid-2023.
• GBP bidders will be waiting for Friday’s UK GDP print.

GBP/USD fell to a fresh 19-week low on Thursday, piercing the 1.2700 handle before finding near-term technical support from 1.2650. The Pound continues to ease with a lack of meaningful faith behind it, while broader markets continue to bolster the Greenback higher across the board.

Producer Price Index (PPI) producer-level inflation figures came in roughly as expected, despite a slight upswing in annualized core PPI numbers. Headline PPI matched forecasts in October, rising 0.2% MoM compared to the previous month’s revised 0.1%. Core PPI for the year ended in October accelerated more than expected, ticking up to 3.1% compared to the expected 3.0% rising above the previous period’s 2.9%, which was also revised slightly higher from 2.8%.

Coming up on Friday, UK Gross Domestic Product (GDP) figures will give Cable bidders something to chew on, while Greenback buyers will be looking for a surprise improvement in US Retail Sales. UK GDP for the third quarter is expected to sink to 0.2% QoQ from the previous quarter’s print ofg 0.5%. US Retail Sales are likewise forecast to ease slightly in October, expected to print at 0.3% MoM compared to September’s 0.4%.

GBP/USD price forecast

The GBP/USD daily chart shows a pronounced downtrend with significant bearish momentum. After a brief consolidation period around the 1.2900 level, the pair has broken below the 50-day and 200-day Exponential Moving Averages (EMAs), which were providing support near 1.2990 and 1.2865, respectively. This bearish cross between the 50-day EMA (blue line) and the 200-day EMA (black line) is a strong sell signal, commonly known as a "death cross," suggesting further downside potential. The recent break below these key moving averages reinforces the likelihood of continued downward pressure, with the next significant support zone around 1.2600.

The MACD indicator also confirms the bearish bias, as the MACD line has crossed below the signal line in negative territory. This indicates a strong bearish trend with increasing downside momentum. The histogram bars are deepening below the zero line, suggesting that selling pressure remains strong and the pair may struggle to find support. If the bearish momentum persists, GBP/USD could extend its losses, potentially testing the psychological 1.2500 level. A break above the 1.2865 resistance (200-day EMA) would be required to alleviate some of the immediate downside pressure, though the bias remains bearish as long as price remains below the 50-day EMA.

GBP/USD daily chart