GBP/USD outlook turns bearish amid risk aversion and dollar strength

GBP/USD dropped 0.6% to 1.2540 as persistent risk-off sentiment and robust dollar demand weighed heavily on sterling. The pair faces technical pressure after failing to hold above the key 1.2600 psychological level, with momentum indicators turning increasingly bearish. Dollar Index strength near 106.20 reflects broad USD appreciation amid geopolitical uncertainties and cautious Fed positioning. Cable's decline accelerated after breaking below the 200-day moving average at 1.2575, signaling potential for extended losses. Immediate support lies at 1.2500, while resistance has formed at 1.2580. UK economic data remains mixed, offering little support for the pound. Traders are positioning for potential further downside, particularly if US data continues supporting dollar strength. The technical setup suggests a bearish bias in the near term.