Cable has backed away from its early NorAm high at 1.2520, trading in a tight 1.2480-1.2500 range as markets await first clear Brexit-related moves from the new UK PM. Johnson sounded more statesman than hard-liner in his initial comments [nL9N22B01N], helping boost the pound back near 1.2500. Still, Johnson's talk of leaving the EU on Oct 31 "no ifs or buts" while preparing for no-deal Brexit nS8N24D03U eroded some bullish sterling sentiment, pushing GBP/USD back near NorAm lows. GBP/USD bulls have reason to be cautious. After three years and no momentum in Parliament toward adopting a withdrawal agreement, the EU remains unwilling to renegotiate.
Meanwhile, fading British inflation and growth are turning the BoE dovish, making the case for GBP/USD gains more difficult.
IMM positioning data shows specs net short 76,357 contracts, though longs have held near 35,000 contracts since September 2018 1096742NLNG.
With little hope for a new deal to pave an easier path to Brexit before the Oct 31 deadline, support at 2019's low at 1.2382 seems likely to be tested.