- GBP/USD hovers near two-year lows on risk-off trading, UK growth woes.
- Cable confirmed an ascending triangle breakdown on the 4H chart on Wednesday.
- Bears gear up for the additional downside towards the pattern target of 1.2158.
GBP/USD is trading back below 1.2200 following a temporary pullback to near 1.2230 region, as disappointing UK GDP data continue to power GBP bears.
The UK economy contracted 0.1% in March while expanding merely 0.8% QoQ in the first quarter of 2022, backing the BOE’s forecasts of a likely recession later this year.
The downbeat UK growth data combined with the risk-off market profile keeps the downside pressure intact on cable.
Investors shrugged off the upbeat comments from the BOE Deputy Governor Dave Ramsden, as he said that “the central bank isn’t talking down the economy in forecasts.”
Looking at cable’s four-hour chart, Wednesday’s confirmation of the ascending triangle breakdown, below the 1.2310 rising trendline support, has opened floors for a test of the pattern target measured at 1.2158.
The Relative Strength Index (RSI) is probing the oversold territory around 30.00, allowing room for more downside.
Should the abovementioned key support give way, a test of the 1.2100 round figure will be inevitable.
GBP/USD: Four-hour chart
On the other side, any recovery attempts will need acceptance above daily highs of 1.2255.
The next upside target is seen at the bearish 21-Simple Moving Average (SMA) at 1.2302, above which the triangle support now resistance at 1.2323 will come into play.