GBP/USD lingers near the lows just above 1.2900

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That saw price action fall back below both key hourly moving averages as sellers seized near-term control but the momentum stalled at the 38.2 retracement level @ 1.2927.

But amid more Brexit focus today, the pound is slipping a little further to start the session with cable falling to 1.2906 and threatening a break of the support level above.

Below that, there is some minor support closer to 1.2900 and then 1.2875-80 before we move towards the swing region around 1.2850 should the downside momentum extend.

As much as the pound has proven to be resilient as of late, the next two days will be tough to navigate especially with Brexit risks set to steal the spotlight.

The EU is still maintaining that they won't move their red lines and it will then come down to how Boris Johnson responds to that later in the week.

There might be room for more talks going into next month i.e. kicking the can down the road but perhaps the immediate narrative will be for both sides to posture hard in hopes that someone will provide a little wiggle room to maneuver.

That may very well exemplify the risks for the pound, especially with a slowing recovery and lack of robust fiscal support, not to mention the worsening virus situation.

GBP/USD D1 14-10

In the bigger picture, perhaps the pound's near-term potential has topped at the 50.0 retracement level of the swing move lower since the start of September.

But for buyers to keep any conviction for a rebound following this week's mess, a hold above the 100-day moving average @ 1.2824 and 200-day moving average @ 1.2711 will be crucial from a technical perspective.

If the recent lows at 1.2676 give way amid the potential negativity this week, it could be a slippery slope towards 1.2500 next for cable.

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