The GBP rebounded somewhat from its Monday low and currently trades around 1.2120. This is despite a broad risk-off sentiment ahead of Theresa May's speech at 11:45am London time today: Gold and the JPY are up, equities and the USD are down from yesterday. Market participants expect May to announce that her government will favour a "hard" Brexit rather than a "half in, half out" agreement.
Cable is still trading close to its lows with negative momentum intact. GBP futures positions are still deep in negative territory but less extreme than in mid-2016, suggesting that the fall in the GBP might well continue. Hard Brexit + Trump = GBPUSD approaching parity? That seems extreme at the moment, but it's something I consider.
With this much uncertainty in the markets but no real story to play just yet I feel comfortable on the sidelines. Waiting for ECB on Thursday and, more importantly, to finally see some actions by Trump and his cabinet beginning early next week after his inauguration on Friday.
Open positions as of 17/01/2017 9:00am CET: Flat
Realized YTD return: +0.7% from 2 trades