Rapid developments from the UK on the political front saw the sterling logging gains. The British PM Boris Johnson was met with resistance as lawmakers scramble to block a no-deal Brexit. This is positive for the pound sterling traders as it lowers the odds of a hard Brexit. Lawmakers are also floating the idea of extending the Brexit deadline to January 31st. The news sent GBP to post gains for a second day after slipping to historic lows briefly on Tuesday.
GBP/USD at Risk of a Short-Term Correction
Price action in the currency pair currently shows a hidden bearish divergence. The Stochastics oscillator forms a higher high against a lower high in price. This could result in prices snapping back. GBPUSD can test the lower support at 1.2082 in the near term. If the declines stall at this support, there is scope for GBPUSD to maintain the upside bias.