After a bit of a breather in mid-May as the dollar rally retraced slightly, cable is slumping hard again in the past few sessions with the greenback finding bids across the board.

The pound side of the equation isn't helping, especially when you get data points like this.

As inflation pressures heat up, the UK is gripped by a cost-of-living crisis that is seeing it as the forerunner in the recession race. The divergence between the economies and central bank appetite is what will be a key factor when trading FX in the months ahead.

In this regard, the pound is leading the charge to the downside as the UK looks set to be the first major economy in facing recession risks.

That will be a major test of the BOE's resolve to stay on the tightening path and market pricing may waver if we continue to see more dire economic data coming out from the UK.

For now, the year's low in cable at 1.2155-64 looks set to be tested before a critical test of the 1.2000 level comes into play.