Against the tide of USD strength, we have seen GBP recouping some of its Brexit based losses, with the Cable moves (eventually) through 1.2000 from early October being redress to some degree. EUR/GBP has been the key driver more recently, given the USD buying theme since the US elections. The EUR cross rate has been well contained on any material bounces, as the EU political landscape has soured considerably in recent weeks/months.
However, .8425-30 is a major tech level in the cross rate, with .8333 lower down key for UK corporates (is 1.2000 in the inverse rate) for hedging purposes. As such, near term gains in Cable may struggle into the 1.2550-1.2600 area – as it has this morning, so we look to have a near term stalemate developing and some much needed relaxation in volatility as Brexit concerns slip out of the limelight for now.