Brexit chaos leaves pound very vulnerable
Updated
Trade setup - While sterling volatility had been widely expected to rise as the Brexit clock ticked down, we are happy to remain bearish on the pair in the short-term. We are looking for a short entry at 1.7380, with a stop just above the previous major high at 1.7490. With the Brexit vote likely to fail and the range of outcomes from here so diverse we target the 1.7000 to 1.7100 zone.
Why we like it - With the current fractured political backdrop within the UK, taking a long position in GBP is just so hard. We sit in the camp that there is a good chance of a positive outcome, but there is still so much to play out here and most of the outcomes suggest more pain to come in the short-term for GBP. The clear "trend is your friend" phase is in play, as the pair makes lower highs and lower lows. In terms of Fibonacci levels, the pair has retraced 23.6% of the last major range indicating weakness and key support level at play.
Want to be ahead in the game - Sign up to Pepperstone daily fix - by Chris Weston, Head of Research at Pepperstone
Disclaimer.
Trading leveraged products carries a high level of risk and may result in you losing substantially more than your initial investment. Pepperstone Group Limited is licensed and regulated by the Australian Securities and Investments Commission (AFSL 414530). Pepperstone Limited is authorised and regulated by the United Kingdom Financial Conduct Authority (FRN 684312). This information not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.
Why we like it - With the current fractured political backdrop within the UK, taking a long position in GBP is just so hard. We sit in the camp that there is a good chance of a positive outcome, but there is still so much to play out here and most of the outcomes suggest more pain to come in the short-term for GBP. The clear "trend is your friend" phase is in play, as the pair makes lower highs and lower lows. In terms of Fibonacci levels, the pair has retraced 23.6% of the last major range indicating weakness and key support level at play.
Want to be ahead in the game - Sign up to Pepperstone daily fix - by Chris Weston, Head of Research at Pepperstone
Disclaimer.
Trading leveraged products carries a high level of risk and may result in you losing substantially more than your initial investment. Pepperstone Group Limited is licensed and regulated by the Australian Securities and Investments Commission (AFSL 414530). Pepperstone Limited is authorised and regulated by the United Kingdom Financial Conduct Authority (FRN 684312). This information not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.
Trade closed: stop reached
We got stopped out on this trade and as such, the position has been closed.
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