GBP/USD Forecast: further slides ahead as rising inflation dents consumption

The Pound plummeted amid broad dollar's strength, also undermined by poor UK data that indicates shrinking consumption in the kingdom, as inflation starts to weighs. The BRC like-to-like sales fell 0.6% in the year to January, below previous month reading when it stood at 1.0%. House prices also contracted according to the Halifax survey, down by 0.9% during the same month, and rising by 2.4% in the three months to January, from a previous 6.5%.

The GBP/USD printed 1.2346 so far this Tuesday, having bounced from the level but still under pressure, as Brexit concerns also weighed on the pair, with the ongoing Parliamentary discussion over the Brexit bill. The house of commons have been voting past midnight, but May's Conservative Party managed to reject opposition's amendments.

The pair stands a few pips above the mentioned low, which also stands for the 50% retracement of the latest bullish run. The pair is sharply bearish and poised to break lower, as technical indicators head south almost vertically, with the RSI indicator now around 25, and the price far below a bearish 20 SMA and below the 200 EMA for the first time since Jan. 20.

The pair has a major static support around 1.2330, and a downward acceleration below it could see the GBP/USD falling down to 1.2260, the 61.8% retracement of the mentioned rally. To the upside, the immediate resistance comes at 1.2385, followed by 1.2430. It would take a recovery above this last, quite unlikely at the time being, to see the pair recovering up to 1.2460/80.

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