GBP/USD buyers return despite weak UK GDP as dollar struggles persist
GBP/USD recovered from intraday lows to trade at 1.2710, up 0.2% despite disappointing UK GDP data showing a 0.2% contraction versus 0.1% growth expected. The pound's resilience stems primarily from persistent dollar weakness following yesterday's soft US CPI print. Cable found support at 1.2680 before buyers stepped in, pushing the pair back above the 1.2700 handle. The UK's economic weakness raises questions about the Bank of England's hawkish stance, potentially limiting sterling's upside potential. However, with US inflation trending lower and Fed pause expectations growing, the dollar remains under broad selling pressure. Technical analysis shows GBP/USD facing resistance at 1.2750 (200-day MA) with support established at 1.2680. Tomorrow's US PPI data and next week's UK employment figures will be crucial for determining the pair's near-term direction.
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