Pound Gaps Lower As Brexit Becomes Possible

Morning Report: 06.30 London

• This morning, the British pound has opening with a gap lower as Brexit opinion polls show an ever narrowing public opinion. A ‘leave’ outcome has moved from being unlikely to being a possibility, at least going by the polls. The betting markets are less dramatic though, reflecting the fact that populations typically vote with the status quo. The current betting odds imply a 67% chance for a ‘remain’ vote and 33% chance for a ‘leave’ vote. As we saw with the UK general election though, opinion polls and betting markets are not infallible. The pound is softer across the board this morning, especially against the US dollar and euro.

• The big mover this morning is the yen which is attracting funds on the ‘risk off’ theme. Some have attributed this to Brexit fears, but it’s more likely to be part of a general switch to quality in line with recent day’s trading.

• The US dollar is nudging back after two days of gains and corresponding selling in oil prices.

                                                                                                                                                                                                                                                                                                                                                                 
Coming up today:

• Coming up today we have German Buba president Weidmann speaking at 08.00.

Trade Idea:

• The EUR/GBP has rallied sharply this last week as Brexit chances increase. However, there could be an opportunity for a value bet trading in the opposite direction.

As the betting odds imply, despite advances, a Brexit vote is still by far the less probabe outcome. Secondly, should the UK vote to leave, it is not good news for the euro either. There is a risk of triggering similar referendums in other countries such as the Netherlands.

A good way to play this is a ONE TOUCH trade predicting that the EUR/GBP will touch 0.7800 before June 24th for a potential return of 317%.

                          
                                                         

Disclaimer: This financial market report is intended for educational and information purposes only. It should not be construed as investment or financial advice and you should not rely on any of its content to make or refrain from making any investment decisions. The views expressed in this report are those of the author and do not necessarily reflect the views or position of Binary.com accepts no liability whatsoever for any losses incurred by users in their trading. Binary options trading may incur losses as well as gains.