- A thirst for the US currency given a funding and liquidity panic, plus as a safe haven flight to quality has seen the US dollar surge across all major currencies, even seeing the USD rallying against the usual go to safe haven, the Japanese Yen.
- In addition, partially due to the acceleration of the COVID-19 virus in the UK, alongside the increased funding required from the relatively aggressive fiscal response in the UK, the Pound has plunged lower versus the Euro, Yen and US Dollar.
- This has seen GBPUSD move through the Brexit lows and to plunge to its lowest level since 1985!
GBPUSD day trade outlook: Capitulation plunge to multi-decade low (lowest since 1985)
An extremely aggressive capitulation type plunge Wednesday to the lowest level since 1985, through multiple long-term supports, to keep the threat lower into Thursday.
- We see a downside bias for 1.1477 and 1.1405/00; a break below aims for 1.1347 and 1.1272/50, maybe 1.1000.
- But above 1.1600/05 targets 1.1661/62, which we would look to try to cap; above opens risk up towards 1.1753 and maybe 1.1851.
GBPUSD intermediate-term outlook
- We see an intermediate-term bear trend with the break below 1.2725.
- Downside risks: We see risks for 1.1477, 1.1250, 1.1000 and 1.0500.
- What changes this? Above 1.2423 switches the intermediate-term bull trend to neutral and above 1.3200 to a bull trend.
Daily GBPUSD Chart