Yesterday saw the largest 1-day move in GBPUSD for 5 years – highlighting that the pair is firmly in play as the asset of choice should the United Kingdom leave the European Union this Thursday. Having been absolutely friendless on the move lower to 1.4035 on Wednesday last week, news out over the weekend of a significant change in the opinion polls now sets the percentage chance of a ‘leave’ victory at just 25%. The subsequent move on that is a huge jump to trade to an intra-month high of 1.4730. I can’t believe that at least some of the move was not due to the large increase in initial margin from various leveraged trading environments: with the increase ultimately meaning you either fund the position or exit the position. Evidently, the majority of traders took the latter option. Technical levels on the upside and downside are tricky to highlight given the significance of the vote on Thursday –the high for the year is 1.4775, with the next band of resistance at 1.5230, whilst on the downside 1.35 should act as support, at least in the short term.
Jordan Hiscott, Chief Trader
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