The British pound has just hit a new post-Brexit low of 1.3220 as of writing. The United Kingdom’s currency continues its free-fall in the aftermath of the referendum results to exit the European Union. Sterling has been underperforming against virtually all currencies on Monday with the increasing uncertainty about the future of the country wreaking havoc across the financial markets.
A panic selloff of the pound sterling is increasingly likely with a major trend line on a very long term chart in the eyesights of smart money traders. The GBP/USD has been relentless in its decline this morning after the market gapped down over 2 figures on Monday’s open.
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The EUR/GBP pair hit 0.8292 in today’s trade, with the single European currency marking new post-Brexit high.
The British pound is likely to continue to trade under pressure since its multi-decade lows which were hit last Sunday are making an interesting technical setup formation on a very long term chart.
As seen below, the GBP/USD has been strongly supported on multiple occasions when prices have dropped below 1.4000 – both in the aftermath of September 11th 2001 and after the Great Financial Crisis of 2008-9. This latest black swan event has pushed sterling way below previous lows marked on both previous occasions during the last couple of decades and many traders are strongly convinced that a strong move lower is bound to happen.