The GBP/USD opened in Asia around 1.9510 after getting clobbered lower amid broad USD strength, but the GBP was the worst performing currency against the USD. The Asian session was a quiet one with the GBP/USD edging down to 1.9504 before popping up to 1.9531 early in the afternoon when EUR/JPY and GBP/JPY buying flows were noted.
The GBP/JPY came under pressure early in the Asian session falling to 232.65 when a number of carry trades were pared back by Japanese investors. Once those flows were completed US names came in to stabilize the cross above 233.00. The EUR/GBP consolidated the gains made yesterday and traded in a 0.6746/51 range during the quiet session. The heavy sell off in the GBP/USD and GBP crosses yesterday caught the market by surprise as there was no obvious catalyst to the GBP slide against the field.
Analysts speculate that the market was extremely long the GBP/USD and GBP/JPY and the slide in base metals and gold prices caused a bit of cautious paring back of longs. Key support is found at 1.9435 while resistance around 1.9750 has been validated by yesterday's price action.
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