GBP/USD tumbled in the NY afternoon session on Tuesday, extending losses after breaching the 200-day moving average at 1.2819. This break has added momentum to the pair’s bearish trend, as the dollar strengthens on rising U.S. Treasury yields and expectations that U.S. economic resilience will keep yields elevated. Sterling’s slide to a low of 1.2719 reinforces the bearish outlook, and technical indicators now suggest further downside risks. IMM positioning shows sterling’s long bias may be under pressure, with many positions likely pared following recent political and economic events.

The technical picture for GBP/USD remains challenging for bulls, with immediate support at 1.2719, followed by the August low of 1.2666. Further below, the 100-week moving average at 1.2601 offers a potential line in the sand for sterling. On the upside, resistance has shifted to the former 200-DMA support at 1.2819, with further resistance at the recent high of 1.2874. Despite the UK's forward-looking interest rate advantage over the U.S. into 2025, the pound is struggling as the dollar’s yield-driven rally maintains control.

As markets remain focused on the “Trump trade” and rising U.S. yields, sterling may remain vulnerable to additional downside pressure. Only a close back above the 200-DMA could potentially signal a shift in sentiment, though for now, the path of least resistance remains lower, with sellers eyeing the August low at 1.2666 as the next target.