Breaking: GBP/USD plunges below 1.19, down over 1,300 in 9 days as severe recession feared

Yohay Elam FXStreet

GBP/USD has been extending its downfall and has dropped below 1.19, falling to levels last seen in October 2016, during a flash crash. At the time of writing, cable has reached a low of 1.0877 with a limited bounce. It traded near 1.32 on March 19, a fall of over 1,300 pips in nine days.

The coronavirus crisis is weighing heavily on markets with forecasts of a severe recession coming. UK Prime Minister Boris Johnson spoke of a "wartime government."

See: Three reasons for the sell-off, with the bottom out of sight

Here is how the crash looks on the daily chart:

The daily chart comes in handy amid the fall. The currency pair is down to the lowest since October 2016, when it suffered a flash crash. The Relative Strength Index is well below 30, indicating extreme oversold conditions, but abnormal conditions mean it could continue lower.

Support awaits at 1.18 and 1.17.

Resistance is at 1.1957, the September 2019 low, and then by 1.20 and 1.2120.

More: GBP/USD: Momentum of the sell-off on Cable continues [Video]

Author

Yohay Elam

FXStreet

Yohay is in Forex since 2008 when he founded Forex Crunch, a blog crafted in his free time that turned into a fully-fledged currency website later sold to Finixio.

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