Where now for the GBP? An election is coming
Election or referendum is ahead for the UK
The GBP has reached a high as 1.2385 on Monday this week, as investors have calculated that the risk of a no-deal has receded. PM Johnson has to now go and ask the EU for an extension after a House of Commons defeat. The UK Parliament is currently prorogued and not meeting, so the next volatile period for the pound will likely return once early elections are announced.
So, the big sentiment shift to watch for short term opportunities on sterling is an early election or referendum announcement. A 2nd referendum outcome will be GBP bullish because of the pools reflecting a majority who would now vote 'remain' if asked a second time about leaving the EU. Chart below from politico.