GBP/USD struggles near one-month low, just above mid-1.3300s post-US data

• GBP/USD witnessed aggressive selling on Thursday and dropped to over a one-month low.
• The post-FOMC strong USD rally remained uninterrupted after mixed US macro releases.
• The bias seems tilted in favour of bearish traders and supports prospects for further losses.

The GBP/USD pair maintained its heavily offered tone around the 1.3365 area, or the lowest level since December 23 and had a rather muted reaction to mixed US macro data.

According to the first estimate released by the US Bureau of Economic Analysis this Thursday, growth in the world's largest economy accelerated to a 6.9% annualized pace during Q4 2021. This was well above consensus estimates pointing to a reading of 5.5% and overshadowed weaker than expected US Durable Goods Orders.

This comes after the Fed on Wednesday reaffirmed market expectations for an eventual lift-off in March and did little to dent the strong bullish sentiment surrounding the US dollar. Apart from this, the UK political turmoil undermined the British pound and continued exerting heavy downward pressure on the GBP/USD pair.

Meanwhile, Thursday's fall below the 1.3400 mark validated this week's bearish break through the 100-day SMA and might have already set the stage for a further depreciating move. The negative outlook is reinforced by bearish technical indicators on the daily chart, which are stall far from being in the oversold territory.

Nevertheless, the fundamental backdrop and the technical set-up supports prospects for an extension of the recent sharp pullback from the vicinity of mid-1.3700s. Hence, a subsequent slide towards testing the next relevant support, around the 1.3320-1.3315 region, remains a distinct possibility amid sustained USD buying.

Technical levels to watch