Cable falls to test the low from April last year

The pound is once again the laggard in trading today and that is dragging GBP/USD down to test the low from April last year. The low then was seen at 1.2299 and that is precisely where we are at right now. Back then, price was somewhat defended by its 100-week moving average but we have well broken below that back in December already.

As such, a crack of the April low this time around will have more oomph in driving further downside pressure in the pair.

The next key support will only come from the October 2023 lows under 1.2100. Thereafter, we can start talking about the psychological support at the 1.2000 mark.

As Adam pointed out here, the selloff in gilts is a key factor in play right now as well. That doesn’t bode well for sterling’s fortunes at the moment and more so when you couple it with the technical playbook above.

Even EUR/GBP has reversed a break under the pivotal 0.8300 mark to trade to 0.8380 now today. That’s a major blow for sterling bulls to start the new year.

This article was written by Justin Low at www.forexlive.com.