Big moves are priced in for the pound
One thing is clear...there is massive divergence is the vol structures between GBP crosses and all other developed FX pairs. Look at the implied vol rank, which looks at the current IV level relative to its 12-month range. Big moves are expected, and that is key for your position sizing.
1-week risk reversals are also interesting, notably again in GBPUSD. Here, despite spot trading at 1.2849, we see traders paying up for put vol over call vol, and consider that last Thursday this stood at +1,8, with traders paying up for call volatility. This is an interesting shift in sentiment, even if spot hasn't followed lower.
The other talking point Friday was the China data dump, although take a
listen (https://www.rba.gov.au/) to RBA gov
Lowe's speech and it is clear we are getting to the lower bounds. The China GDP
print will get the headlines though, as it is the lowest annual read since
1992, but the IP print was a big beat, and that is important. Comments today
from the Stats Bureau are a big a worry detailing the domestic economy faces
complex and 'serious situation', rise in external uncertainties. There hasn't
been too great a reaction in markets though.