• GBP/USD is down over 300 pips on the day.
• The risk-averse market environment provides a boost to the greenback.
• Disappointing data releases from the UK weigh heavily on GBP.

Following a consolidation phase during the Asian trading hours, GBP/USD came under heavy bearish pressure and lost more than 200 pips on the day. As of writing, the pair was trading at its lowest level since 1985 at 1.1045, down nearly 2% on a daily basis.

Earlier in the day, the data from the UK revealed that the business activity in the private sector continued to contract in early September with the preliminary Composite PMI dropping to 48.4 from 49.6 in August. This reading came in below the market expectation of 49.

Furthermore, the Confederation of British Industry's latest Distributive Trades Survey revealed that the Retail Sales Balance plunged to -20 in September from +37 in August and fueled the GBP selloff.

In addition to dismal UK data, the intense flight to safety provides a boost to the dollar and further weighs on the pair. US stock index futures were last seen losing between 1.3% and 1.6% on the day, suggesting that safe-haven flows are likely to continue to dominate the financial markets.

The US economic docket will feature S&P Global's Manufacturing and Services PMI reports later in the day.

Technical levels to watch for