It was always going to be a tough ride for the pound after GBP/USD broke below the pandemic lows under 1.1400 but the pace of the drop in the past two sessions has been rather staggering. Stops were triggered on the way down on a break below 1.1200 and then 1.1000 before another plunge today in Asia trading to a low of 1.0357 (depends on your charts but it is below 1.1400).
From a technical perspective, there really isn't any real support for cable to hang on to as it trades to its lowest levels since 1985. The lows then came in around 1.0520-45 and we're pretty much angling towards a firm break now, even if there is a slight bounce back to 1.0540 levels at the moment.
It is but the decimation of the UK economy, despite the fact that the government is throwing the fiscal sink at trying to bolster growth conditions. Tax cuts are great, but not so much when you're trying to stimulate a failing economy at its core. When your policy announcements cause rates to rise but your currency to depreciate considerably, you are but the definition of an emerging market. That says a lot about the case in point for the UK at the moment.
Shades of parity are now in the picture and it is tough to bet against the falling momentum in GBP/USD unless something fundamental changes. But at least after the steep decline recently, we may be overdue for a technical bounce - though it might just be a bit part reprieve at the end of the day if nothing else changes.