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GBPUSD Update: Brexit fears are dissipating

Market Analysis
Chart_16-06-20_17-14-37

GBPUSD, Daily

The two latest polls published on June 17th and 18th support the view that the Remain camp will win. Rising from behind and being at par with the Leave camp in the poll from 1th and and leading by 3% in the latter June 18th poll Remain camp seems to have the momentum on their side. Currency markets have been reflecting these polls by rallying strongly. GBPUSD is up by more than 3% over the last two days. Another supporting factor for the Sterling bulls has been the likelihood of higher turnout in the referendum following the MP’s murder. It was feared earlier that many of the Stay campaign supporters might not bother to vote but now the sentiment has changed and people are expected to register their opinion against the brutal act and come to vote in higher numbers.

Even though this is not fair on the Remain campaign who had nothing to do with the murder this sentiment change has increased the betting odds for the UK staying in the EU. Reuters reports today that betting agency William Hill’s odds for the UK remaining in the European Union are now at 83%.

GBPUSD is now trading near the May highs after creating a weekly hammer candle last week. This is technically a strong bullish sign but at the same time the pair is trading near resistance levels and could be vulnerable to corrections. Therefore trading approach should be careful as well. I posted earlier today a brief analysis on GBPUSD on my Facebook page (Link) which reflected this reality. I posted a support level and suggested that the price is likely to move higher but the due to the fact that major resistance is relatively close, both my targets were fairly conservative. Both targets T1 at 1.46 and T2 at 1.4625 were hit soon after the London session opened. Send me a Facebook friend request in order to follow these short analyses as well.

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Janne Muta

Chief Market Analyst

HotForex

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