GBP/USD faces pressure at 1.2625 as dollar strength persists

GBP/USD remains under selling pressure, trading at 1.2625 after failing to sustain gains above 1.2680 resistance. The US Dollar Index holds firm at 106.30, supported by safe-haven flows amid global trade concerns. Sterling weakness reflects both external dollar strength and domestic UK challenges, with markets pricing in slower Bank of England rate cuts following persistent inflation concerns. Technical analysis reveals a bearish bias below the 1.2680 pivot level, with immediate support at 1.2600 psychological level. The 200-day moving average at 1.2585 provides the next major support zone. RSI indicators show oversold conditions developing, suggesting a potential bounce, though any rallies likely face selling interest near 1.2650-1.2680. UK economic data remains in focus this week, with services PMI and retail sales figures potentially influencing sterling direction. Traders should monitor the 1.2600 support closely, as a break could accelerate declines toward 1.2550.