GBP/USD hovers near 2-month lows, headed for third weekly decline

GBP/USD extended losses on Friday and fell to fresh 7-week lows as the pound failed to benefit from decent UK GDP data.

GBP/USD fell for a fifth straight day and is on track to post its third weekly loss in a row, despite a softer greenback seen over the last days. GBP/USD dropped to its lowest level since Nov 2 at 1.2227, and it was last trading at 1.2255, down 0.24% on the day.

The UK Q3 GDP final came in at 0.6% QoQ versus 0.5% expected and following a 0.5% increase in Q2. Meanwhile,the current account deficit shrunk in Q3, coming in at £-25.5bln versus £-28.3bln expected.

In the US data showed the University of Michigan consumer sentiment index rose to 98.2 in December from 98.0 previous and expected while US new home sales increased 5.2% in November to a seasonally adjusted annual rate of 592,000 and above 575,000 expected.

GBP/USD levels to watch

In terms of technical levels, next supports are seen at 1.2227 (Dec 23 low), 1.2204/00 (Nov 1 low/psychological level) and 1.2081 (Oct 25 low). On the other hand, resistances 1.2297/1.2300 (Dec 23 high/psychological level), 1.2377 (Dec 22 high) and 1.2419 (50-day SMA).