Cable merchants will bear in mind right this moment for a LONG time.
The UK authorities’s announcement of a “mini” price range reducing taxes and capping vitality payments has spooked worldwide buyers, resulting in a surge in UK gilt yields and driving GBP/USD all the way down to its lowest ranges since 1985.
Whereas we’re nonetheless a good distance from GBP/USD parity, right this moment’s worth motion marks a giant step in that route.
Within the near-term, merchants can be asking when the promoting will cease. After breaking beneath the COVID panic lows, the 1985 low within the 1.0500 space may beckon in due time, however given the deeply oversold studying on the 14-day RSI, we’d count on a short-covering bounce earlier than then so long as we don’t see monetary markets implode within the coming week or two. There’s additionally an out of doors likelihood of UK policymakers intervening out there within the coming days to stem the bleeding.
This week’s large breakdown beneath earlier help within the 1.1400 space means merchants can be trying to promote any rallies above 1.1100 or 1.1200 within the coming week, with solely a break again above 1.1400 giving bears pause.
Supply: TradingView, StoneX
