It all started with the dollar making some headway two weeks back, before a drop below 1.2500 made things really tough for GBP/USD. There was a brief consolidation phase below the figure level but we're seeing sellers pick up the momentum again in the last two days. And now, the pair is down another 0.4% to 1.2315.

GBPUSD D1 22-04
GBP/USD daily chart

From a technical perspective, there is very little support in stopping the drop here. The next key support target will be the October low itself at 1.2037. That's still nearly 300 pips away from here.

Unless the mood music changes up for the dollar, it might be tough to argue otherwise. And that is despite the recent inflation data from the UK, as argued last week here.

While the BOE is still poised for a potential August rate cut, the Fed's timeline has readjusted quite significantly. We're looking at one potentially in September but even that isn't as much as a given as compared to the BOE for August. And that pretty much outlines the risk balance for both the dollar and pound currently.

I mean, if sterling can't even compose itself even with a better risk mood today, that's not a good sign in the short-term especially with the chart looking as it is above.