The pound dropped below the psychological level of 1.6000 against the dollar on Wednesday, after its rally earlier in the day faltered at 1.6069.
GDP/USD hit 1.5987 during late morning European trading, erasing much of its earlier gains. The pair was likely to support around 1.5851, Monday's low, and resistance at 1.6276, Thursday's high.
The pound's decline followed the release of weaker-than-expected data on Britain's services sector activity.
The Chartered Institute of Purchasing and Supply and Markit Economics said their Purchasing Managers Index fell to 54.5 from 56.8 in December. Analysts had expected the figure to remain the same.