GBP/USD could return to its lowest level since 1985 at $1.05
From a technical analysis perspective, the GBP/USD trend has been unmistakably bearish since the summer of last year (at the same time that the PMIs started to pull back). The support at $1.15 that it bounced off during the worst of the covid crisis in March 2020 is now being tested and will be crucial.
The risk/reward ratio is technically in favor of buying above this support. It will therefore be preferable to wait for a decline below this threshold to position yourself on the downside. The next major support to watch would be the 1985 low at $1.05.
In the meantime, the pullback below $1.15, the pound could consolidate above this threshold, or even attempt a rebound, but a bullish reversal seems unlikely without a pivot from the Fed or an improvement in the economic outlook.