Brexit weighs on market

22 June, 2016

Brexit weighs on market

It's been one of those trading days today where you can't escape the Brexit and all its fall out as it continues to dominates news feeds globally - especially when it comes to the trading world. The UK economy continues to feel the heat globally as once again no is quite sure of the direction the market is taking, but at present it looks to be so far a positive view as the UK polls are showing a slight lean to the remain side. After the 23rd little will matter when it comes to the Brexit if Britain votes to remain, but the deciding factor will be if markets think this is a one off in the long run. Certainly it does not feel to be the case and the recent rejection of resistance is something to go off for traders looking for confidence.

On the charts the rejection of 1.4774 should not be a surprise given that the economic climate has so far been very volatile. The market continues to feel a number of polls, all of which paint very different pictures and the recent UK elections add doubt to the polls over all as to the impact they will likely have. Regardless from the current position the GBPUSD could easily fall to support levels at 1.4446, and this could easily be achieved on the 23rd given the volatility of the day. Certainly if we do see a drop, I can see support at 1.3961 being the optimal target for support traders in the short term, as markets will struggle to price the GBPUSD. Technical levels will also struggle in the long run, as an event like this throws the door wide open to horrific volatility with little to no repercussions for traders.

Overseas and the NZD continues to deft expectations as it plays off the back of a weaker USD. As usual the NZDUSD continues to come under pressure as the USD weakens and pushes it higher up the charts, this also comes on the back of recent comments from the finance minister  who tried to talk down the value of the high flying kiwi. However, the jump in NZ migration data to +5500 will be noticed by the Reserve Bank of New Zealand which will put further pressure on the NZ housing market.

On the charts the NZDUSD has jumped higher to 0.7163 and at this level the currency movements are unsustainable given the NZ economy is still struggling. Long term expectations are for a drop lower to 0.7046 and below support levels at 0.6961. The market will regardless be looking at the 20 day moving average which could provide support after the effects of the Brexit vote in the short term. Either way the NZDUSD continues to find itself over bought at present and a correction is most certainly on the cards.


Source link  
Greek debt causes EUR volatility

It could be a return to instability if the Greek issues rear there ugly head again. Recent reports out of Brussels...

Sterling pressured ahead of UK retail

The main event risk for Sterling on Thursday will be April’s UK retail sales report which will be vital in providing some insight...

U.S. equities touch new highs, still boring

The best way to describe recent market price action is boring. Although S&P 500 touched...


Euro reverse gains

French say no to populism and yes to a united Europe following a similar trend in Austria and The Netherlands over the past six months...

Commodity sell-off

The sharp depreciation in commodity prices overnight has weighed on risk sentiment, with global stocks poised...

USD surges on positive data

USD traders were upbeat today as the US economic data was much stronger than expected...


Gold becomes more attractive

It seems almost surreal that another war might be on the horizon for the United states...

Gold catches traders eyes

Markets have been very interesting as of late, and one the most interesting movers...

Strong buying in Yen on US concerns

The USD hit the brakes today, as the market looked unhappy on the US uncertainty...

  


Share: