GBP/USD breaks key trendline support, signals potential further decline

GBP/USD fell 0.5% to 1.2680 after breaking below a critical ascending trendline that had provided support since early June. The technical breakdown suggests growing bearish momentum, with the pair now trading below both the 50-day and 100-day moving averages. The sterling's weakness reflects mounting concerns over UK economic growth, with recent PMI data showing contraction in manufacturing activity. Additionally, expectations for Bank of England rate cuts have increased following softer inflation readings. The trendline break opens the door for a test of 1.2650 support, where the 200-day moving average converges with horizontal support. Below that level, 1.2600 becomes the next major target. Resistance is now seen at the broken trendline near 1.2720, with any recovery attempts likely to face selling pressure. The daily RSI has dropped below 40, confirming bearish momentum as traders position for further pound weakness.