EUR/GBP market turns indecisive ahead of the Brexit vote

• EUR/GBP created a big doji candle yesterday, signaling indecision in the market.
• The pair could drop if the Brexit vote is defeated by a margin of 50 or below.

The EUR/GBP market has turned indecisive ahead of the historic Brexit vote.

The currency pair witnessed a solid two-way business yesterday, before ending largely unchanged on the day. Essentially, the pair charted a doji candle, which is widely considered a sign of indecision.

A close below 0.8875 (previous day’s low) would signal a continuation of the sell-off from Monday’s high of 0.9062. It is worth noting that the pair is already on the defensive, having closed below the support at 0.8944 (Jan. 4 low) on Friday.

Even so, the breakdown could end up trapping bears on the wrong side of the market, if the Brexit vote is defeated by 100 or more votes. Moreover, a loss this large could lead to heightened political uncertainty.

Sterling, however, may pick up a strong bid, sending EUR/GBP below 0.8875 if the vote is defeated by a margin of 50 or below. Moreover, that would embolden UK’s May to try for a second approval.

As of writing, the pair is trading at 0.89.

EUR/GBP Technical Levels