BOE’s Bailey ins a letter to G20 finance ministers and central bank governors:

• Since April, market conditions have improved and asset prices have recovered
• We have seen further economic and geopolitical risks crystallize and global debt vulnerabilities remain high.
• Uncertainty continues to weigh on growth expectations.
• We need to remain vigilant to the rest of disruptive market moves.

The GBPUSD has extended its move to the downside and is now approaching a key swing area near 1.34137—a level that served as a low on both May 29 and June 17 (see red numbered circles on the chart).

Today’s decline saw the pair break below the 50% retracement level of the move up from the May low, which came in at 1.34638. The next major retracement target sits at 1.33873, representing the 61.8% retracement of the same move higher.

Last week, buyers attempted to regain short-term control by pushing above the 100-hour moving average. However, sellers consistently leaned against that level, rejecting each attempt and forcing the price back down.

With the decisive break below the 50% retracement today and continued rejection of key resistance, sellers remain in firm control. The bearish momentum remains intact, and further downside toward the 61.8% level cannot be ruled out.