GBP/USD Drops Below 1.2900 After Weak UK GDP Compounds Dollar Strength

Sterling extended losses against the dollar, with GBP/USD falling 0.5% to 1.2880 following disappointing UK economic data. The UK's GDP growth slowed more than expected, expanding just 0.1% month-on-month versus 0.3% forecast, raising concerns about the British economy's resilience. The weak data compounds pressure from broad dollar strength driven by US-EU trade tensions. Technical analysis shows GBP/USD breaking below the psychologically important 1.2900 level and its 200-day moving average at 1.2895. Immediate support lies at 1.2850, with a break potentially accelerating losses toward 1.2800. Resistance has formed at the broken 1.2900 level, with stronger barriers at 1.2950. The combination of soft UK fundamentals and risk-off sentiment favoring USD suggests further near-term weakness for sterling. Traders await Thursday's UK inflation data, which could influence Bank of England rate expectations and provide direction for the embattled pound.