GBPUSD Down 4 Days, Falls to 1.27

Investors paid attention to today's UK fiscal data. According to the Office for National Statistics figures, public borrowing was nearly a fifth greater than expected. For the fiscal year 2021-2022, the UK public sector's net borrowing totaled 151.8 billion GBP, well above the 127.8 billion GBP forecast by the Office for Budget Responsibility a month ago. 

The amount for the year was 165 billion GBP less than the previous fiscal year when the government spent massive sums to sustain the economy amid the worst of the Covid-19 lockdowns. 

However, it remained the third-highest total since records started in 1947. On the other hand, Borrowing fell short of forecasts in March, coming in at18.1 billion  GBP, compared to the 19.25 billion GBP projected in a Reuters survey.

It looks like the pair will test the key long-term support near 1.2680, as shown on the weekly chart. However, the outlook remains bearish since the Pound trades below the 200-week moving average. 

Sterling looks heavily oversold. Thus, we can't rule out any short-squeeze corrections. However, the pair must jump back above 1.29 or even 1.30 to stabilize from the medium-term perspective.

FX Strategists at UOB Group Lee Sue Ann and Quek Ser Leang noted further downside in GBPUSD could target the 1.2650 level and probably 1.2600 in the short term. Overall, GBP is expected to stay under pressure as long as it does not move above 1.2900