Trading Forex and CFDs is risky

GBP What a volatile week…and more to come

Market Analysis
2016-06-10_11-57-05

GBPUSD, Daily        

Sterling has seen a bout of Brexit-related volatility today (and this week), dipping sharply against the dollar, euro and other currencies, before whipping back some. One-month implied volatility for Cable spiked to a new six-year high of 23.7%, up 2 points on the day, as Cable clocked a six-day low at 1.4410. The pair has since recouped above 1.4440. EURGBP spiked from sub-0.7810 levels to over 0.7850, since settling around 0.7830. In a word, choppy, and very much reflective of the fast nearing referendum, which takes place the Thursday after next. Televised debates between Remain and Leave campaigners reached fever pitch this week, stirring a sense of unease among onlookers. The FT’s poll tracker continues to show a narrow 2 percentage point lead for the Remain camp, with 45% support versus 43% support for Leave. Despite the narrowness of this, Bookmaker Ladbrokes is showing that the betting market is giving a 74% probability for the UK remaining in the EU, up from the 69% nadir seen earlier in the week after a spate of polls suggested a shift in support in favour of Leave. Our hunch is that the 12% of undecided voters — who presumably lack the headstrong conviction for leaving the EU like true Brexiters — will be more likely to fall on the Remain side of the fence, if only out of fear of near- to-medium term economic consequences of Brexit.

Construction output data and the BOE Consumer Inflation expectations both beat their consensus figures. Consumers now expect the price of goods and services over the next 12 months to rise by 2.0% compared to 1.8% in the last quarter.

GBPUSD is currently 1.4431 having traded as low as 1.4409.  DAILY near term support at 1.4415 and resistance at 1.4545. 1.4700 remains the longer term resistance level as the pair bounces between the 20 DMA and 50 DMA.

 

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE! The next webinar will start in:

Stuart Cowell

Market Analyst 

HotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.