Resurgent Brexit risk following UK PM Johnson's apparent success in limiting parliament's ability nL5N25O21M to avoid a chaotic exit from the EU suggests that sterling will be hard pressed to return to its recent highs anytime soon.
Adding to sterling pessimism is the continued lack of progress on the Irish backstop nL5N25O4TN or renegotiating the withdrawal agreement with Brussels.
The Brexit uncertainty also quashes what little chance there might have been for a BoE rate hike.
Short-Sterling futures 0#FSS: are rising, factoring in lower rates, with two-and and three-year futures gaining faster than the front end of the curve.
GBP/USD volatility is pricing increased uncertainty over one- to three-month horizons ahead of the Oct.
31 Brexit deadline.
Support by the 10-DMA at 1.2190, though bruised on today's Brexit news, is holding for now.
However, a close below the 10-DMA eyes the 21-DMA at 1.2151 and recent trend and 2019 lows by 1.2065 and 1.2015.
Faced with heightened UK political, diplomatic and global economic growth uncertainties it would seem a top has formed in GBP/USD at recent highs by 1.2300.