Volatility Tumbles as GBP/USD Stabilizes

GBP price, news and analysis:

  • Traders looking to predict the near-term direction of the British Pound are finding it harder as volatility in GBP continues to fall.
  • After the drop in GBP/USD last Friday, it has now stabilized close to the 1.23 level rather than the previous 1.24.

GBP volatility continuing to fall

Directional trades in GBP/USD are becoming more difficult as Sterling volatility continues to fall. After trading close to the 1.24 level for most of last week, and its drop Friday, the pair has found a new level close to 1.23 and is relatively stable there despite the news that UK Prime Minister Boris Johnson is in a hospital intensive care unit suffering from coronavirus symptoms.

GBP/USD Price Chart, One-Hour Timeframe (March 30 – April 8, 2020)

Chart by IG (You can click on it for a larger image)


Data provided by

of clients are net long.

of clients are net short.

Change in Longs Shorts OI
Daily 13% -16% -2%
Weekly 18% -1% 9%

While other currencies continue to be buffeted by risk-on/risk-off flows as optimism about the coronavirus pandemic ebbs and flows, GBP/USD volatility has dropped from a high above 25 on March 23 to its current level just above 14 according to the CBOE/CME Sterling volatility index.

FX British Pound Volatility Chart, Five-Hour Timeframe (February 3 – April 7, 2020)

Latest GBP volatility chart.

Source: Investing.com

Johnson has spent a second night in intensive care and his condition has been reported to be stable. While he is on oxygen support, he is not on a ventilator.

Historical Volatility: A Timeline of the Biggest Volatility Cycles

We look at Sterling regularly in the DailyFX Trading Global Markets Decoded podcasts that you can find here on Apple or wherever you go for your podcasts

— Written by Martin Essex, Analyst and Editor

Feel free to contact me via the comments section below

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