The pair is down 0.4% on the day with the pound moving to be the laggard in the FX space. This comes amid news of imminent further COVID-19 measures by the UK government to get ahead of the omicron variant.
The relative uncertainty posed by omicron is still a key risk for markets and today is a reminder of that, after the early optimism at the start of the week.
This won't be the latest twist to the saga surely, so expect more testing times to come.
Going back to the pound and cable, the drop below 1.3200 now opens up a potential push towards the 38.2 retracement level @ 1.3165. Beyond that, sellers may target a push towards 1.3000 next from a technical standpoint.
The pound's uneasiness on the day is also not helped by the situation in EUR/GBP:
The pair is now running into a key test of its 200-day moving average (blue line) @ 0.8555. The key technical line has held previous advances recently and will once again be a feature in trading this week.
If buyers can break above that, it would provide a lot of confidence in search of the next leg higher. In turn, that will expose further vulnerabilities in the pound in the sessions ahead.
