GBP/USD: based on 1.42 handle after tragedy and turbulence overnight

Ross J Burland FXStreet

Sterling crosses and Brexit were yet again taking over the spotlight while the BoJ and Fed decisions faded into the background.

It has been a tragic time for the UK this week, from Eurocup 2016 football hooliganism to a murder scene over the EU referendum when Labour MP Jo Cox died after being shot and stabbed multiple times following a constituency meeting.

Markets sold the pound from above the 1.42 handle before demand drove the price back up on the news that EU campaigning would be canceled one week before the referendum date on the Jo Cox tragedy. The lows of 1.4012 were very short-lived and sterling rallied through previous highs until 1.4256, faded back to 1.4200 and has traded sideways since. GBP/JPY rallied from 145.50 to 148.80.

GBP/USD: volatility risk premium to record levels - Nomura

GBP/USD levels

Further GBP/USD rallies may find a tough time getting through 1.4330, 13th June highs and 16th May lows ahead of 1.4350 and the 100 4hr sma at 1.4403. To the downside, a break below 1.4200 and 1.4115, initial support lies 1.4083/05 area where the January and April lows were made and these guard the 1.3837 February low, as noted by analysts at Commerzbank.

Author

Ross J Burland

FXStreet

Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.

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