GBP/USD popped up aggressively from 1.4470 session highs all the way towards 1.4660, surpassing by almost 80 pips last Friday's US NFP-induced highs, with news agencies, including ours, not finding a single catalyst that may have been behind the move, therefore speculation is on the rise that a fat finger could be what caused such an 'out of whack' reaction in the Sterling considering the absence of news.
Assumption of fat finger = selling opportunity?
Should no fresh news hit the wires about a potential catalyst behind the move (by now some news agencies such as Blomberg or Reuters should have come up with a possible trigger), the spike might be assumed to have been an error (fat finger), and as reported in our prior article, may represent a genuine selling opportunity for some players given the recent UK refendum polls, which have recently shifted towards the Brexit camp.
Looking at what's coming next for the Pound, Valeria Bednarik, Chief Analyst at FXStreet, writes: "There won't be relevant macroeconomic releases in the UK until next Wednesday, when the kingdom will publish is April production data. In the meantime, market players will trade accordingly to Brexit risks..."
Technically, and ignoring the spike seen in Asia, Valeria notes: "According to the 4 hours chart, the downward risk is limited at this point, as the price is holding above its 20 SMA (now adjusted higher), whilst the technical indicators have turned modestly lower within neutral territory. A downward extension below the mentioned daily low, however, can see the decline extending down to the 1.4250 region, a strong static support area."
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