GBP/USD extends decline to 1.2640 amid persistent UK inflation concerns

GBP/USD has fallen 0.4% to 1.2640, marking its third consecutive day of losses as persistent UK inflation concerns weigh on sterling. The pair has broken below the key 1.2650 support level, with selling pressure intensifying after UK services inflation remained stubbornly high at 5.9%, well above the Bank of England's comfort zone. The US Dollar Index has gained 0.2% to 104.75, adding to the pound's woes. Technical indicators point to further downside potential, with the RSI at 42 suggesting bearish momentum without being oversold. The next support level sits at 1.2600, coinciding with the 100-day moving average. Market participants are pricing reduced odds of BoE rate cuts this year, but concerns about UK economic growth are offsetting any potential support from higher rates. A break below 1.2600 could accelerate losses toward 1.2550, while resistance now stands at the former support of 1.2650.