Binary.com Daily Market Report (24th Jun)
June 24, 2016 8:18 amVideo
Latest News
- Trading Signals for GOLD (XAU/USD) for April 17-19, 2024: sell below $2,400 (21 SMA – double top) April 17, 2024
- Technical Analysis – GBPCAD hits a wall but bulls not ready to give up April 17, 2024
- Trading Signals for Ethereum (ETH/USD) for April 17-19, 2024: sell below $3,125 (21 SMA – 2/8 Murray) April 17, 2024
- Analysis for the EUR/USD pair on April 17th. Jerome Powell didn’t help the dollar much April 17, 2024
- Analysis for GBP/USD pair on April 17th. British inflation overtakes American inflation April 17, 2024
- USD/JPY: Simple Trading tips for novice traders on April 17th (US session) April 17, 2024
- GBP/USD: Simple trading tips for novice traders on April 17th (US session) April 17, 2024
- EUR/USD: Simple trading tips for novice traders on April 17th (US session) April 17, 2024
- GBP/USD: trading plan for the US session on April 17th (analysis of morning deals) April 17, 2024
- Technical Analysis – EURUSD takes a breather after sharp tumble April 17, 2024
- Market continues to price in a plethora of rate cuts for 2024 – Special Report April 17, 2024
- EUR/USD: trading plan for the US session on April 17th (analysis of morning deals) April 17, 2024
- Technical Analysis – EURGBP maintains bearish bias amid pennant formation April 17, 2024
- EUR/USD. April 17th. Jerome Powell supports the dollar April 17, 2024
- GBP/USD. April 17th. Inflation in Britain is falling, but not as much as the market wants April 17, 2024
- Tesla Q1 Earnings: Poor deliveries point to disappointing results – Stock Markets April 17, 2024
- Video market update for April 17, 2024 April 17, 2024
- Forex forecast 04/17/2024: EUR/USD, GBP/USD, Gold, Bitcoin and Ethereum from Sebastian Seliga April 17, 2024
- Technical Analysis – Gold struggles to jump above 2,400 April 17, 2024
- GBP/USD: trading tips for beginners for European session on April 17 April 17, 2024
Pound Plunges to 30 Year Low
as UK Votes Brexit
Morning Report: 07.00 London
• The UK has defied opinion polls and is projected to formally vote for to leave the European Union. In a re-run of the general election, pollsters appear to have underestimated the voting power of the older generation who were far more likely to turn out and vote. The younger generation it seems were vociferous on social media, but were significantly less likely to cast their vote. The result not only blind sided pollsters though, financial and betting markets have been caught unawares.
• Global markets have reacted, but the epicentre of this earthquake is sterling. The pound is experiencing record one day declines, falling to its lowest level for over 30 years. GBP/JPY -14%, GBP/USD -10% & EUR/GBP +6%.
• Away from the pound, there has been a general flight to quality, with the dollar index rallying to its highest levels for the year and yen pairs sinking even further
• Even loosely connected currencies such as the Australian dollar have been impacted with a major reversal on the AUD/USD and AUD/JPY.
• Gold, the world’s favourite safe harbour has rallied hard against the US dollar.
Coming up today:
• There are planned economic items throughout the day, but everything will pail in comparison to the Brexit reaction.
• German Ifo Business Climate is released at 09.00.
• US core durable goods follow at 13.30, with revised UoM consumer sentiment at 15.00.
Trade Idea:
• So what next? If the UK government’s projections are anything to go by, the UK has just chosen the fast track to economic oblivion. This is not necessarily going to happen though. Economists have missed many of the major crises in recent years, economics is after all an imprecise science involving human actors. Therefore, there is a real possibility that the UK might recover from this position quicker than expected. How much of the UK’s economy is driven by being part of the EU compared to being part of the European continent is an important distinction that has not been clearly been answered.
• The biggest danger with Brexit has always been the uncertainty – If there’s one thing that markets hate more than anything else it is uncertainty. The last time the UK experienced something along these lines was ‘Black Wednesday’ on exit from the ERM in the 1990s. This occasion saw sharp falls in the pound not just over a week, but with follow on selling over the rest of the year. It took over 6 months for the pound to bottom out. Some would argue that this period should have been called ‘golden wednesday’ as the resulting devaluation brought about a competitive advantage to UK manufacturers. This time around, the UK economy is in a better position and the pound was not coming from such an oversold position.
• The optimistic case is that the uncertainty will pass as families and traders slowly return to their day to day lives. Businesses will continue to trade and cross border transactions will continue. After all, trade is primarily a business to business and person to person affair at its heart. The pessimistic case is that the resulting uncertainty will translate into a shock recession, that is a sense self fulfilling.
• My personal view is that the UK will be ok in the medium to long term. The economic warnings about Brexit were probably exaggerated and the UK will survive and adjust. This process will take years though and betting on further downside over coming weeks may pay off, with numerous twists and turns until bottoming out in 12-18 months time.
Please keep checking our website for updates on our trading conditions as we allow markets to settle.
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.
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