GBP/USD to extend its slide unless it reclaims 1.22

GBP/USD has slumped to its weakest level in two years below 1.22 as weaker than expected UK growth data weigh heavily on the pound. In the view of FXStreet’s Eren Sengezer, the pair looks likely to continue to push lower amid risk aversion.

Things look bad for the pound after dismal data

“The UK's Office for National Statistics reported that the British economy grew by 0.8% on a quarterly basis in the first quarter. This print missed the market expectation of 1% and reminded investors of the Bank of England's (BoE) warning that there could be a recession in 2022, causing the pound to come under heavy selling pressure.”

“Brexit jitters put additional weight on the pound's shoulders. The European Union (EU) is reportedly ready to suspend the trade deal with the UK if the Northern Ireland Protocol is revoked unilaterally.”

“In case the pair fails to reclaim 1.22 (psychological level, descending trend line), additional losses toward 1.2150 (static level from May 2020) and 1.2100 (May 15, 2020, low, psychological level) could be witnessed.”

“1.2250 (former support, static level from June 2020) and 1.2300 (psychological level, 20-period SMA) align as the next recovery targets if buyers manage to lift cable above 1.22.”