GBP/USD Breaks Down

After trading under considerable pressure the last 24 hours, following comments from the BOE’s King that a softer Sterling was helping rebalance the economy and that 2 major British banks were on the brink of collapse last October due to a liquidity shortfall (RBS & HBOS), the Pound continued lower and abruptly so after the 1.60 handle were apparently stops awaited. The Cable has recovered somewhat off the lows, but with equities continued to be pressured and the USD holding its bid, the short-term bottom could still be ahead. On the daily chart below we see support at the 38.2% retracement of the recent move to 1.70.

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