If this support is defended, a possible double bottom pattern could be formed, which is a bullish formation. In that case, we could see a nice rally targeting the 1.30 level. However, this resistance seems to be well defended by bears and each jump to this level has been met with selling pressure.
Thus, as long as the GBPUSD pair trades below 1.30, the medium-term outlook seems bearish.
Alternatively, if the bearish pressure reappears during the US session, the support of 1.2780 will be tested again. In case of a bearish breakdown, stop-losses of long positions should be hit, which could send the Pound further lower.
The next target for bears in this scenario will most likely be at the 1.27 level, followed by a possible leg lower to 1.25.
Sentiment has worsened notably over the previous days, which usually benefits the US dollar. Therefore, if stocks continue falling, we will most likely see the continuation of the decline in the GBPUSD pair.
