• GBP/USD comes under some selling pressure on Friday and snaps a two-day winning streak.
• Aggressive Fed rate hike bets, recession fears revive the USD demand and act as a headwind.
• Bulls also turn cautious ahead of the last day of the BoE’s emergency gilt purchase program.

The GBP/USD pair faces rejection near a descending trend-line resistance extending from late August and edges lower on the last day of the week. The pair drops to the 1.1255-1.1250 area during the early part of the European session and for now, seems to have snapped a two-day losing streak.

The US dollar attracts some dip-buying on Friday stalls the previous day's sharp retracement slide from the post-US CPI swing high, which, in turn, exerts downward pressure on the GBP/USD pair. The early optimistic move in the equity markets fizzles out rather quickly amid concerns about a deeper global economic downturn. This, along with the prospects for a faster policy tightening by the Fed, helps revive demand for the safe-haven greenback.

Furthermore, traders opt to lighten their bullish bets around the British pound amid nervousness over any sudden moves on the last day of the Bank of England's temporary gilt purchases program. That said, talks about the reversal of the new UK government's vast tax cuts announced in September act as a tailwind for sterling and help limit deer losses for the GBP/USD pair. This, in turn, warrants some caution before placing aggressive bearish bets.

There isn't any relevant macro data due for release from the UK on Friday. The US economic docket, meanwhile, features the release of monthly Retail Sales figures, the Prelim Michigan Consumer Sentiment and Inflation Expectations Index. This, along with the US bond yields, speeches by influential FOMC members and the broader market risk sentiment, will drive the USD demand and produce short-term trading opportunities around the GBP/USD pair.

Technical levels to watch