In today's article we will focus on the British pound.
Yesterday published the results of telephone interviews by Ipsos Mori for the Evening Standard newspaper about the upcoming referendum on the withdrawal of Great Britain from the EU, which showed that 55% of British people in favor of preserving the EU, and only 37% of the output of its composition.
The figure above 50% made such a strong impression on the markets that the currency pair GBPUSD rose by 200 points, and remained near the peak of the day, despite the publication of the evening is very positive for the US dollar Moments Open Market Committee. The members of the HIF, who publicly stated repeatedly in recent years that a rate hike in June is still on the agenda, have consolidated their views per minute Committee.
These telephone surveys very much at odds with the results of surveys on the Internet, which is likely to reflect the age difference of the respondents.
According to the Financial Times, as a whole, taking into account both the telephone and Internet surveys, currently 46% of the British in favor of retaining a part of the EU, and 40% of output.
The difference of 6%, rather shaky, and the situation can change quickly.
If you recall referendum in Scotland, for a month or two supporters of independence inferior opponents 5-7% and more, but for two or three weeks the number has become greater than the number of opponents of independence.
The big difference about Scotland's independence referendum, a referendum on membership in the EU is that a large group of very influential members of the establishment stands for yield, and among them prominent members of the party of David Cameron.
In my opinion, today there is a good opportunity to open short positions on GBP against a number of currencies.
Recall what forecasts were made on GBPUSD in late February, when the difference in votes was only 2-3 per cent, and the pair is trading below 1.40. Almost all agreed on the fact that GBPUSD will fall in the event of the UK from the EU to 1.30, and some believed that the GBPUSD may fall to 1.20-1.25.
Thus, we have the potential GBPUSD fall of about 15%.
At the same time GBPUSD growth opportunities are limited by the fact that after yesterday's minutes and began to revive expectations for Fed rate increase.
To date, the probability of a rate hike is estimated by the market (CME Group Fedwatch) to 33.8% in June, in July - to 55.8%, in September - to 66.5%.
While in June the rate is definitely not to be raised, because at least the same referendum in the United Kingdom, the likelihood of raising rates in July or September, it seems to me quite real.
In this calendar time statistics in the United States tends to improve, it is expected a good indicator of GDP in the second quarter (forecast by the Federal Reserve Bank of Atlanta on May 17 - 2.5%!), Inflation is higher than in other countries (cost of rental housing grows exponentially! ), employment data are just as good as some degradation will spoil the picture. Why the Federal Reserve raised rates in July or September, such a favorable situation?
Anyway, waiting for the Fed raising rates in the coming months will remain high.
This means that even in the case of GBPUSD vote against leaving the EU has the potential for growth at best in the area of 1.50, with a further reversal, which is incomparable with huge potential fall in the case of UK output.
In other words, we have the potential GBPUSD rising to 1.50 in comparison with the potential of falling into the area GBPUSD 1.30.
This is very advantageous for a short position GBPUSD risk-reward ratio: 16 pieces to 4 pieces.
The closer to the June 23, the greater will be the volatility in the GBPUSD and other krosskursov Briton. In the coming weeks on the results of the poll a couple can go to 300-400 points per day, and on this background, all other factors impact on the British pound losing value.
Volatility - this is just what they love traders all over the world. The British pound will be the hit of the season.
In addition to the USD the pound can be sold against EUR. On the EUR will also be reflected fears UK exit from the EU, but to a lesser degree. EUR - this is in addition to and pronounced protecting the currency risk and the sale will be positive for her. In the coming weeks (before the referendum) I expect EURGBP to return to the area of 0.80, and in the case of the UK leaving the EU could grow and EURGBP in the area of 0,85-0,87. It is possible that you can sell GBP against the AUD and the NZD, although these transactions involve a greater risk in terms of a strong dollar.
From my point of view, in the long term position of the next month sell GBPUSD and buy EURGBP - favorable rates!
Place your bets, gentlemen!
Author: Nicholas Ludanov Source
The forecasts presented in this review are the private opinion of the author. Comments them are not a recommendation to trade or manual work in the financial markets. Alpari does not accept any liability for any direct or indirect damages (or other kinds of damage) that may occur in the case of the review of materials.
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