The pound has been in decline against the dollar since last summer but the selling appears to have accelerated in the last couple of trading session, which suggests the outlook is pretty bleak.
The pair has traded gradually lower over the last seven months, remaining within the descending channel almost entirely during this period, but it broke below here recently and the pace of selling has picked up since.
The pair temporarily found support around 1.47, a prior level of resistance, but this was short-lived as the pair failed to break back through prior support and back into the channel only to break back through the day’s lows.
It should also be noted that the failed rally means the marabuzo line of last week’s marabuzo candle was not pierced, which is a bearish signal.
With 1.47 now broken, the next significant technical support can be found around last year’s lows around 1.4566. Given how the pair has traded over the last couple of sessions, I would not be surprised to see this come under significant pressure and potentially be broken, leaving cable at five-and-a-half year lows. This could open up a move back towards 1.4230 in the coming weeks.