GBP/USD searching new comfort zone after 1800 pips plunge

GBP/USD managed to stage a nearly 200-pip bounce over the last hour, climbing to the 1.3750 zone after a new downside attempt was contained by the 1.3560 area.

GBP/USD recovered some ground, but recent recovery is tiny when compared to the 1800 pip drop seen during the Asian session when the world found out UK was not a member of the European Union anymore.

Cable scored its lowest level in over three decades at 1.3226 and the subsequent bounce was capped by the 1.3980 zone, which gave way to a quieter phase as investors assessed the news. At time of writing, GBP/USD is trading at 1.3750, recording a 7.4% loss on the day.

The Brexit victory also triggered turmoil and a run to safety across financial markets, with commodities and equities slumping, EM getting hard hits and the dollar, the yen and gold arising as the main winners on their safe-haven status.