GBP/USD Price Analysis: Plunges to fresh YTD low, weakens further below 1.2900 mark

• GBP/USD witnessed aggressive selling on Friday and plunged to its lowest level since November 2020.
• Dismal UK Retail Sales weighed heavily on sterling and exerted pressure amid sustained USD buying.
• Technical selling below the 1.3000 round-figure further accelerated the intraday bearish momentum.

The GBP/USD pair came under intense selling pressure on the last day of the week and tumbled to its lowest level since November 2020 during the first half of the European session.

The British pound weakened across the board in reaction to the disappointing release of the UK monthly Retail Sales figures and failed to gain any respite from mixed PMI prints. This, along with strong pickup in the US dollar demand, further aggravated the bearish pressure surrounding the GBP/USD pair.

From a technical perspective, sustained weakness below the 1.3000 psychological mark was seen as a key trigger for bearish traders and prompted aggressive technical selling. The subsequent breakthrough the 1.2900 round figure now seems to have set the stage for a further near-term depreciating move. The negative outlook is reinforced by the fact that technical indicators on the daily chart are holding deep in bearish territory. That said, RSI on hourly charts is already flashing extremely oversold conditions, warranting caution for aggressive traders and positioning for further intraday losses.

Nevertheless, the GBP/USD pair seems vulnerable to prolonging a near one-month-old descending trend and accelerating the slide further towards the next relevant support near the mid-1.2800s. Bears might then aim to test October 2020 low, around the 1.2820 region, which could act as a near-term base. On the flip side, any meaningful recovery attempt back above the 1.2900 round-figure mark now seems to confront stiff resistance and remain capped near the previous YTD low, around the 1.2970-1.2975 area.

GBP/USD 4-hour chart

Key levels to watch