Cable topped 1.50 after a second voting day poll showed an even bigger victory and as The Sun conceded. This joined a first poll and talk (later denied) that Nigel Farage conceded defeat. Also initial turnout figures seem to be supportive for the Remain camp.
But things may not be that positive for the pound,. Here are 3 reasons why we may have already seen the top in GBP/USD.
- In line with previous expectations: Given the polling in recent days and especially on voting day, this is not a huge surprise. It might take some time for the “buy the rumor, sell the fact” move, but given the past, it can certainly come.
- False break of 1.50?: The pound is sometimes called “the devil’s currency”. 1.50 is not any round number but a very round one. After some stop hunting that reached 1.5017, we may have seen the top and the road is clear for falls.
- Wounds are open: Unless we have an outstanding victory for Remain, the country seems divided, the ruling Tories are divided and also opposition Labour is divided. There is also a divide between Scotland and the rest of the country, the old and the young, the rich and the poor, etc. If the result is close, a relief rally could be followed by a return of the gloom.
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So, there are good reasons to think that the pound can fall from here, assuming real results confirm the polls: a small victory for Remain.
All in all, if this is all the pound could do on a concession from The Sun, is there any rally fuel left?
And in case all the polling was wrong and the Leave campaign won, the fall will turn into a plunge.
Update: GBP/USD crashes to 1.48 on Newcastle report
And GBP/USD < 1.43 and bounces 200 pips on Sunderland Leave Win – this article had a good timing, but I did not imagine that the pound would fall on the results, but rather on the markets moving on.
What do you think?
More:
- EU Referendum Preview: Positioning, Scenarios and Key Results Releases
- Is your broker Brexit ready?
- Brexit or Bremain – all the updates
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