GBP/USD daily chart
The pound is again a laggard in today's trade and that is dragging GBP/USD down to test the low level since last April. The low was then seen at 1.2299 and that is exactly where we are now. Back then, the price was slightly protected by its 100-week moving average but we have already broken down well below that in December.
Therefore, April's low crack will have more oomph this time in driving lower downward pressure in the pair.
The next major support will only come from the October 2023 lows below 1.2100. After that, we can start talking about the psychological support at the 1.2000 mark.
As Adam said herethe sale in gilts is also a major factor in play at the moment. That doesn't bode well for sterling's fortunes right now and especially when you combine it with the technical playbook above.
Even EUR/GBP has stopped back below the important 0.8300 mark to trade to 0.8380 now today. That's a big blow for sterling bulls to start the new year.
