Sellers are now looking for a firm break below the 1.30 handle as we see price hit a session low of 1.2986. Odds of a BOE rate cut have doubled since last Friday and that is leading to more pound weakness as we get the week started.
The OIS market now sees chances of a rate cut on 30 January at ~46%, up from ~23% at the end of last week. This comes after comments by BOE policymakers as highlighted in the earlier pound update post here.
UK economic data is going to be a key focus in the lead up to the BOE policy meeting this month so make sure to keep an eye on that in the coming weeks.
For today, we'll have UK November GDP figures but it should just reaffirm the economic stagnation in Q4 2019. That said, with pound sentiment rather shaky, a decent-sized miss could trigger further pressure on the quid especially with cable now under 1.30.
There is some minor support to note around 1.2970 and 1.2950 but key support is only seen closer towards the 23 December lows around 1.2905-20 with further bids noted around the 1.2900 level thereafter.