MUFG Research maintains a tactical bearish bias on GBP/USD in the near-term.
"The pound has continued to underperform overnight with cable briefly falling back below the 1.2100-level. The sell-off was triggered by dovish comments from BoE Chief Economist Andrew Haldane who revealed that the BoE is considering negative rates among other options to address the economic slump according to the Telegraph.
Downside risks to the GBP from heightened Brexit uncertainty could return as well in the coming weeks and month ahead. A lack of progress in trade talks has increased the risk of an unfavourable outcome from the EU-UK Summit scheduled for next month," MUFG notes.
"In these circumstances, we expect the GBP to continue to underperform in the nearterm. Cable is set to retest the 1.2000-level although any break below could prove short-lived based on experience from September 2019 and March 2020," MUFG adds.