A break below 1.50 seems probable now but don’t rule out any bearish rallies before that drop happens. GBP/USD has a few risks on the horizon, for one thing there is a general election in the UK in May. There’s also the situation in Europe to consider. The bank of england has said that the UK economy won’t be immune to the downturn and deflationary environment there.

The rate cycle in the UK is well behind that of the US. On the technical view GBP/USD has a floor of 1.40 and seldom sinks below that level but given the strength of the dollar we could see new lows being reached further along and a new context emerge.

gbp/usd historical supports