GBP/USD is now down more than 100 pips on the day and has broken 1.6700.
I wrote about how cable looked like it could teeter yesterday and technicals are a big driver in today’s fall. Two key levels have given way, the 55-day moving average and the May low.
cable daily
The next area of congested support is the 100-dma at 1.6659 which meshes nicely with the mid-April low.
It’s always tough to sell something at the lows of the day in the midst of a 100-pip fall, especially when there’s no big news behind it. There are 40 pips before we get to that next area of support but I’m not sure you can find the right risk/reward to make it work.
In the bigger picture, what’s really happened is that the market wanted Carney to talk about rate hikes but instead the BOE will specifically target mortgage lending to cool the housing market. That pushes rate hikes out at least another few months.
