Breaking below 1.30 and 1.2855/29, the GBP/USD currency pair has been under heavy pressure this week.

Since Friday, the GBP/USD currency pair has fallen, breaking through the two-week-old barrier of 1.2973. There has been no sign of a reversal in the last four trading sessions.

The greenback bulls have been buoyed by the daily Falling Channel breaching to the negative. As the dollar index (DXY) nears its five-year high of 102.99, the cable is projected to continue falling.

The DXY has risen against the pound due to predictions of a rise in interest rates from the Federal Reserve. Because of rising prices, the Federal Reserve is expected to hike interest rates by 50 basis points (bps). According to CME Fedwatch Tool, the Fed will raise interest rates by half a point at each of its next two meetings.

However, the DXY spike was unaffected by the US Durable Goods Orders underperformance. There was a 0.8 percent drop in the monthly Durable Goods Orders on Tuesday, which was lower than the market expected.

Preparations for next week’s interest rate announcement by the Bank of England have made the pound vulnerable. Because of growing UK inflation, the BoE is expected to hike interest rates by 25 basis points. Strong job growth and rising CPI figures suggest a significant BOE rate increase.

Conclusion

Last week’s rally in the GBP/USD looked like a fluke as the pair traded as low as 1.2900.