Brexit Is The Sleeping Giant In The Forex Market
Vantage | Jun 01, 2016 02:00AM ET
The countdown to the UK referendum on EU membership is now well and truly on!
A Brexit really has been the true sleeping giant of risk in the forex trading world, with cable seeming happy to range sideways at higher time frame resistance. But as we head into the final few weeks, is the giant about to be woken from its slumber?
GBP/USD Daily:
Overnight the leave campaigners got what they were looking for. Their first true lead in a meaningful poll, with two (phone and online) Guardian/ICM polls suggesting that the leave campaign has taken the lead 52% – 48%.
A polling result that the money doesn’t quite agree with just yet:
But campaigners on both sides have got their headlines printed, and now the closer we get to the June 23 date, the more relevant the polls become.
And that’s what we are starting to see in the cable price action:
GBP/USD 4 Hour:
As you can see on the 4 hour chart, Cable received a real jolt, dropping hard intra-day on the back of the latest polling headlines hitting the market.
Of course a drop like this on the back of a single newspaper run survey is just as likely to retrace in a single session as common sense prevails, but this is another reminder of the risks that the Brexit referendum poses to GBP/USD traders.
Bremain is no longer a foregone conclusion. Don’t get caught holding positions thinking that is the case.
On the Calendar Wednesday:
CNY Manufacturing PMI
CNY Non-Manufacturing PMI
AUD GDP q/q
CNY Caixin Manufacturing PMI
GBP Manufacturing PMI
USD ISM Manufacturing PMI
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