GBP/USD: surely, more downside to come?

GBP/USD is currently consolidating the volatility of last week while markets stay clear of being positioned in a currency that may or may not have based yet. 

GBP/USD made fresh cycle lows last week prior to the flash crash that took the pound down into the low teens before the price was driven back to the mid point and current spot level back into the 1.20's again. The question now is whether the pound has based for the time being, despite its obvious vulnerabilities in respect to the pending trigger of Article 50. 

Analysts at Brown Brothers Harriman have suggested that the UK is at risk of a vicious cycle. "For structural reasons, there is an efficient pass through of inflation from a weaker currency. There is also a relative quick pass-through of higher rates to UK households via the prevalence of adjustable rate mortgages.  UK rates can rise even while the BOE is buying gilts. The depreciation of sterling will have an impact on the UK current account balance. It will be reduced, but do not be surprised if it comes from reduced volume imports as much as an increase in value exports." 

GBP/USD levels

Spot is presently trading at 1.2357, and next resistance can be seen at 1.2401 (Daily Open), 1.2401 (Hourly 20 EMA), 1.2435 (Monthly Low), 1.2435 (Weekly Low) and 1.2435 (Annual Low). Next support to the downside can be found at 1.2353 (Daily Low), 1.2336 (Daily Classic PP), 1.2046 (Daily Classic S1), 1.1947 (Yesterday's Low) and 1.1939 (Weekly Classic S1). 

Analysts at Commerzbank offered a bearish outlook for a long term trend (1-3 months): "Made an interim low in the 1.1900 region below which lies the 1.0463 1985 low."