After sinking against the dollar yesterday, the pound is holding its own rather well as we begin the new day. But there hasn't been any fresh developments so far to change the fundamental story in the quid and that's worrying for buyers.
The lack of progress in Brexit negotiations and the constant negativity surrounding UK politics isn't going to help with sentiment for the time being and so far there is nothing to suggest a change in that tone.
For now, price is finding some support from the 1.2700 handle but as long as it continues to sit below the 100-hour MA (red line) and the downwards trendline there is no reason to believe the pound will be able to sustain a move back towards 1.3000 so long as the above fundamentals aren't sorted out.
A November Brexit summit to discuss finalising a deal remains distant at this point and the longer this drags on, it will only serve to increase further talks of a no-deal Brexit outcome and that will weigh on the pound further.
While a lot of that negativity has already been baked in, it's hard to quantify something like Brexit and price that in completely. For things like this, more often than not it is about pricing in the fear and uncertainty rather than the outcome itself.
For cable, watch out for the 1.2700 handle today. Once that gives way, I would expect a test of the August low at 1.2662 to come rather swiftly. As for upside move, as mentioned above, as long as price holds below the two key resistance levels, the bias is still to the downside for the pair.