Cable bears eye 1.2570 and UK GDP

• GBP/USD stays pressured within three-week-old bearish trend channel.
• Oversold RSI prods Cable sellers ahead of the key data but bearish MACD signals keep bears hopeful.
• Firmer US Treasury bond yields, fears of UK recession also weigh on Pound Sterling.

GBP/USD remains on the back foot at the lowest level in a week, pressured near 1.2670 amid the early hours of Friday’s Asian session. In doing so, the Cable pair traders portray the cautious mood within a three-week-old bearish trend channel, despite holding lower grounds after declining in the last three consecutive days.

It’s worth noting that the Pound Sterling trader’s anxiety can be linked to Friday’s scheduled release of the first readings of the UK’s second quarter (Q2) Gross Domestic Product (GDP), expected 0.0% QoQ versus 0.1% prior, especially amid fears of British recession.

Also read: GBP/USD wavers amid US CPI data; traders focus on UK’s GDP

Adding credence to the downside bias are the bearish MACD signals. However, the nearly oversold RSI hints at the Cable pair’s corrective bounce off the stated channel’s bottom line, close to 1.2570 at the latest.

It should be noted that April’s peak of around 1.2550 and 50% Fibonacci retracement of the pair’s March-July upside, near 1.2470, could challenge the GBP/USD bears afterward. In a case where the quote fails to bounce off 1.2470, it becomes vulnerable to test the 61.8% Fibonacci retracement level of around 1.2310.

On the contrary, GBP/USD bears keep the reins unless the quote defies the channel formation by crossing the 1.2790 hurdle. Even so, a convergence of the previous support line stretched from March and the 21-DMA, close to 1.2835-40 at the latest, appears a tough nut to crack for the Pound Sterling bulls.

GBP/USD: Daily chart

Trend: Further downside expected