- GBP/USD has fallen around 1.7% after some serious USD strength earlier in the session.
- Now there is a key support level shown on the chart below.
GBP/USD daily chart
GBP/USD has fallen heavily today after the USD strengthened following more risk-off moves. It seems the market is moving to cash after a drop in bond prices, gold and stock indices. This all leads to redemptions with some analyst’s citing margin calls and a move back into cash as the key reason for the move. The Fed has announced a $500 blin round of support via the repo markets. This is not confirmed as QE but it is essentially USD funding for the bond markets. So, in theory, it’s very similar.
Looking at the chart now, it seems the price capitulation was stemmed by the support from 20th September 2019. This level also confluenced quite closely to the Fibonacci extension of 138.2% and retracement at 61.8%. Very rarely do you see such a level, where all things match up so well.