Technically, GBP/USD is on the defensive and targets January 2017 low at 1.1988. Fundamentally, the Dollar has maintained its northerly trajectory, equipped for further political uncertainty as a safe haven. GBP/USD is currently trading +0.43% higher between a range of 1.2014 and 1.2106. The pound took up a bid and corrected the recent UK Gross Domestic Product data-driven slide from a low of 1.2022 today’s aforementioned high on news hat some UK lawmakers were drawing up plans to compel Jonhson to request a last-minute Brexit extension from the EU. In additional headlines, UK PM Johnson is planning a trip to Berlin and Paris to deliver Brexit demands and he also spoke to US President Trump today, discussing global economic issues & trade. However, it is unfathomable to imagine any corrections in sterling to persist all the while that persistent uncertainty evident in the Brexit saga will take a material and lasting toll on the UK’s economy. We have already seen the latest GDP start to play a role in sterling’s southerly trajectory making for an unflavoursome toxic cocktail for those stale bull’s sell-stops that might still be lurking in close proximities – (1.1980/1.2000 area). The GDP data showed that the U.K. economy shrank unexpectedly in the second quarter due to market concerns of a no-deal Brexit and hit fresh 30-month lows and we can likely expect to see more of the same considering a no-deal exit come November is a heightened possibility under Brexiteer Johnson at the helm. US Dollar side to cap GBP rallies However, should there be growing prospects of another exit date extension or a general election, these could give sterling a temporary lift, and considering how short the market is in the Pound, there is plenty fo short-covering potential on soft -Brexit headlines. However, rallies would be expected to be capped as neither of those possible near-term outcomes are an absolute solution. In times of uncertainty, least we forget that the US dollar trend has remained upward sloping despite all of the gloom and doom – The US is also seen as both the best-performing developed market and a yielding ‘safe-haven’ amid global uncertainty. Implied volatility and positioning data It is crucial to know how the markets are positioned and what the expected volatility is for the pair. 90% confident implied volatility for the pair this week was 213 pips and for the pair to move within a range of between 1.2337 and 1.1932. As for the Net short GBP positions, they increased for a twelfth consecutive week on fears about a no-deal Brexit and a weakening UK economic backdrop. “Fear of a chaotic Brexit have surged in response to Johnson taking the role of UK PM and his determination to stick to the October 31 deadline for the UK’s withdrawal from the EU. The release of the weaker than expected UK Q2 GDP report at -0.2% q/q has further undermined the pound in the spot market,” analysts at Rabobank explained. Looking ahead Looking ahead, the key standout risks apart from Brexit headlines for EUR/GBP come with eurozone data, German inflation readings, ZEW and UK employment data. For GBP/USD, UK data as well as US Consumer Price Inflation will be key drivers. The Jackson Hole, Federal Open Market Committee Minutes and Federal Reserve speakers are also slated for the week ahead. GBP/USD levels GBP/USD is on the defensive: “Attention has reverted to the January 2017 low at 1.1988. Below here lies the 1.1491 3 rd October low (according to CQG). Rallies, if seen, should struggle circa 1.2210/1.2320. It stays negative while contained by its 2-month downtrend at 1.2403 today. Only above the downtrend this would introduce scope to the 55 day ma at 1.2502 and the June high at 1.2784,” – analysts at Commerzbank argued. FX Street FX Street FXStreet is the leading independent portal dedicated to the Foreign Exchange (Forex) market. It was launched in 2000 and the portal has always been proud of their unyielding commitment to provide objective and unbiased information, to enable their users to take better and more confident decisions. View All Post By FX Street FXStreet News share Read Next Ripple’s XRP technical analysis: XRP/USD bears are further forcing loss of the big $0.3000 mark FX Street 3 years Technically, GBP/USD is on the defensive and targets January 2017 low at 1.1988. Fundamentally, the Dollar has maintained its northerly trajectory, equipped for further political uncertainty as a safe haven. GBP/USD is currently trading +0.43% higher between a range of 1.2014 and 1.2106. The pound took up a bid and corrected the recent UK Gross Domestic Product data-driven slide from a low of 1.2022 today's aforementioned high on news hat some UK lawmakers were drawing up plans to compel Jonhson to request a last-minute Brexit extension from the EU. 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