GBP/USD (current price: 1.2260)
The Pound had a very volatile day as Cable declined by almost two percent on Tuesday, but climbed back by 1.5% today in early trading, after getting close to the flash-crash lows near 1.20 in yesterday evening. The pair hit another 40-year closing low during the session, below the 1.22 level, as traders are still heavily focused on the negative effects of the Brexit, and the possible hawkish move by the Federal Reserve in the coming weeks, as the Bank of England remains defensive, and ready to cut rates even further.
Our assessment: The cross is down by 1200 pips since early September as the break of the 1.2850 level led to a “waterfall” decline, with the Pound now being deeply oversold.
