There are a number of ominous signs for GBP/USD, which means the next few weeks are likely to be negative.
Last week's biggest one-week drop since October 2016, a whopping 361 pips according to Refinitiv data, has weakened the underlying market structure and signaled that an important top has been left at 1.3516.
A bearish engulfing pattern on the last two weekly candlestick lines -- a smaller, white-bodied candle contained within the larger black candle -- also signaled a major rejection of the upside.
Cable weekly close well below the 1.3149 Fibonacci level, a 23.6% retrace of the 1.1959 to 1.3516 2019 rise, adds to the downside bias.
The pound has lost a great deal of value because of Prime Minister Boris Johnson's plans to take a hard line in Brexit talks with the European Union nL1N28T094.
A close at the end of this week under the 1.2921 Fibonacci level, a 38.2% retrace of the same 1.1959 to 1.3516 rise, is likely to lead to further bouts of weakness.
Weekly Chart: Click here