Following Brexit which pushed GBP/USD ranges lower into the 1.20-1.40 area, and the UK's mini budget in September which saw that range broken with a drop towards parity, it's likely that long-term range will drop again.

This year's trade has likely established the peak of future ranges lies around 1.25, and certainly sustainable gains over 1.30 should not occur if the idea of a lower long-term range is to evolve.

The base of ranges will probably be in the order of 20 cents, roughly 1.05, which would make sense as any down move that threatens parity, or results in a move below it, would change the outlook, resulting in a far more bearish situation and significant decline.

One month option vol (the benchmark) which soared towards 24 in September has dropped to single digits, implying a quiet period, suiting range trading.
As much as the slump towards 1.0327 was overdone, so too was the following surge to 1.2447 that suggested a bright outlook for the UK - far removed from the expected recession.

A retreat towards neutral territory - 50% Sep-Dec gains is 1.1386 - may unfold gradually this year, and become the pivot point for a 1.05-1.25 range.

Recent FX moves and gambling look way overdone nL1N34N0KO

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