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What is the outlook for GBP on crosses?

Here is their view, courtesy of eFXdata:

TD Research  likes to fade GBP rallies on the crosses (especially vs AUD and JPY).

The Brexit deal has reduced near-term GBP uncertainty, but this looks fully priced. Evidence suggests investors have bought into the rebound story, but long positioning now seems stretched. GBP’s excess risk premium has all but disappeared from options markets  with risk reversals reverting toward neutral. However, these have not validated the latest move in spot above 1.35, reflecting sterling’s otherwise-weak fundamental backdrop,” TD notes.

We look to fade this recent GBP strength. With the USD broadly weak, however, we prefer to pursue this first on certain crosses,” TD adds.

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