there was a couple hundred pip move on GBPUSD just after 10:00am on 6 June, price really accelerated. There was no GBP or USD release around that time and all recent news/macro had been priced in. originally I just put it down to a liquidity run with the 1.5500 level being targeted followed by a sent shift caused by this psychological level being breached however, I noted similar movements on USD cross pairs. The only thing I can think of is a delayed reaction to the ECB press conference and rate decision , causing people out of USD and into EUR across pairings. I know we cant pinpoint every move, however this seemed to accelerate pretty quickly, see blue circle attached to chart. If it was to do with bullish Euro having an effect on most USD pairings, It goes to show that I need to be looking at all major currency and instrument sentiment even if only trading cable.
Just wondering if you had a catalyst around that time.
I believe I have the exact answer for you. It was very much related to the concentrated positioning in the Nikkei and USD/JPY. There was (and still is) a lot of money that is heavily invested in long Nikkei and long USD/JPY positions. Those positions last week were pressured. When USD/JPY broke through the stops below the daily lows of 98.80, that set off a tripping of stops that caused a sent/psych shift for a few hours. It led to the barrage of USD/JPY selling as people just dumped their long positions. All that USD specific selling cascaded into EUR/USD and GBP/USD buying, S&P selling off, bonds going up, etc.
It is kind of a weird relationship, because if it was related to the Fed going to delay QE, then the S&P should not have fallen, etc. Which was actually a divergence as the USD was selling off and if that was related to the market anticipating bad econ data from the US, or the Fed delayed a taper, then the S&P should actually have gone up. So when the S&P went down, that was a divergence and the market snapped back higher with the S&P going higher and that was the low of the move.
So there wasn’t any specific news related catalyst. It was market positioning related and stop loss related with the sent/psych shift in USD/JPY.