GBP/USD has rallied 1.21% off June 18's 1.2507 low and is flirting with 30-DMA resistance by 1.2695 .
This rebound is largely on the back of external stimuli, including the Fed's reduced rate and economic growth outlook as well as lingering U.S. trade issues -- with China, Mexico and the EU -- and a ramp-up in tensions with Iran.
The recent strength may be short-lived as UK-specific factors do not support the recent bullish enthusiasm. So far, the transition process from PM May to her most-likely successor, Boris Johnson, has been orderly.
However, the next UK PM will face the same difficulties PM May did in pushing to re-negotiate with Brussels nB5N22W01M and the UK parliament nL8N23Q4YG. Johnson is on record saying that the threat of no-deal is a viable negotiating tack to secure a deal, which will weigh on GBP/USD.
The dovish Fed turn this week, while helping narrow U.S.-developed market yield spreads and weaken the dollar is predicated at least partly on the reduced lower global growth and rate outlook, which Brexit-related risks contributes to.
GBP/USD finds resistance at 1.2763, the June 27 trend high. Bulls need a rise above the 200-DMA at 1.2929 to gain control.
GBP Chart: Click here