As long as the cable trades below 1.30, the short and medium-term outlooks seem bearish as this was a major level and bulls had defended it many times.
The next target for bears could be at 1.28, where highs from 10 June are located. If the Pound drops below this level as well, we could see a larger correction to 1.26.
Alternatively, if the situation improves and sterling starts rallying, the first resistance stands at 1.30. If this level is broken to the upside, we could see another leg higher to 1.3130.
It looks like the greenback might be ready for some correction, as it has been dropping nearly nonstop since the corona crisis. Therefore, positioning is extreme once again and in times like this, speculators are usually forced to cover their shorts.