The pair comes from a losing week in which risk-aversion and fears of global slowdown persisted, but managed to avoid news 2022 lows on Friday, despite the slump. GBP/USD found support and tries to be upbeat today, as the greenback faces difficulties.
Although we can see a recovery, breaking above the EMA200 (1.2350) which could pause the downward bias, looks like a tall order, while the area form there-on looks unfriendly.
Bears remain in control and have the ability to set new lows and test 1.1904, but the next major support at 1.1681 looks distant at this stage.
The monetary policy differential is unfavorable for the pair, since the Fed is committed to its aggressive and front-loaded tightening cycle, after having delivered its biggest rate hike in nearly thirty years last month. The Bank of England has increased rates five times in a row in order to fight surging inflation, but fears of a recession may limit its ability to do more.
Governor Bailey refrained from talking about more aggressive 50 basis points hike during last week's remarks at the ECB Forum, but said that "there will be circumstances in which we will have do to do more" . Incoming policy maker Dr Swati Dhingra sounded dovish during her appearance at the Treasury Committee of the UK Parliament, talking of a "very gradual approach". 
One also has to take into account the political landscape in the Old Albion, which could potentially generate more uncertainty down the road. The UK Prime Minister survived the recent no-confidence vote, but the Conservative party lost two by-elections, while the Scottish First Minister proposed a new Independence Referendum. 
Stocks markets in the US are closed today and the economic calendar does not feature any major release form the UK.
Senior Financial Editorial Writer
Nikos Tzabouras is a graduate of the Department of International & European Economic Studies at the Athens University of Economics and Business. He has a long time presence at FXCM, as he joined the company in 2011. He has served from multiple positions, but specializes in financial market analysis and commentary.
With his educational background in international relations, he emphasizes not only on Technical Analysis but also in Fundamental Analysis and Geopolitics – which have been having increasing impact on financial markets. He has longtime experience in market analysis and as a host of educational trading courses via online and in-person sessions and conferences.
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