The pound rejected the latest Brexit announcement and confirmation from the EU and opted to decline instead, with the GBPUSD pair trading very close to the current cycle lows at 1.27. On Wednesday, the so-called cable was changing hands at 1.2740, which could possibly decline further.
The major support is currently at the mentioned cycle lows near 1.27 and if this one is taken out, the long-term bearish trend could be confirmed, targeting the 1.25 mark in the initial reaction. Also, the greenback is rallying against the Euro, which might push the GBPUSD pair down as well.
On the upside, the first resistance could stand at around 1.28 and if broken, the pair might jump toward the strong zone near 1.2920.
Sentiment remains negative, despite the recent Brexit developments and therefore, rallies could be shortened, which could be a sign that the trend could continue to be on the downside. Both the 100- and 200-day moving averages are sloping downward, which could also support the bearish bias.
If the Dollar index breaks above the current cycle highs at 97.65, we could see further Dollar gains across the currency markets, which would be negative for the GBPUSD pair.
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