The pound has fallen behind again in today’s trading and this is dragging GBP/USD lower to test the low level of April last year. The low was then seen at 1.2299 and that is exactly where we are right now. Then the price was somewhat defended by its 100-week moving average, but we already broke below that in December.

As such, a breakout of the April low this time around will have more power in further downward pressure on the pair.

The next key support will only come from the October 2023 low below 1.2100. After that, we can start talking about psychological support at 1.2000.

As Adam pointed out here, selling gilts is also a key factor in the game right now. That doesn’t bode well for sterling’s fortunes right now, and even more so when you combine it with the technical playbook above.

Even EUR/GBP reversed the break below the key 0.8300 mark to trade at 0.8380 today. That’s a big blow to sterling bulls to start the new year.