Game Over (June 25)

The referendum is over, the UK decided to leave the European Union and a new chapter is now open. What next? A lot of questions on the table and it will take some time for the market to absorb the news. Will they “punish” the GBP by pushing it lower? From what we saw on Friday, tons of Dollars, Yens, Euros etc were injected in the market to protect the GBP. The overall image is not catastrophic (as predicted by the talking heads). The Gbp/Usd closed 300 pips lower than a week before.
The Euro got also affected by the Brexit but not the CHF. The absolute winner was the JPY since it is considered a safe haven. Again do not ask me why, since Japan according tothis site has the biggest government debt to GDP on the planet.
On Sunday Spaniards will elect their new government. Or at least they will try for a second time since the previous one from December gave a fragmented parliament with the first party obtaining a 28,7%. Coalitions were not successful and current poll image is not very promising. A failure to elect a viable government or worst the election of a Eurosceptic government will affect the Euro.
Back to our charts, the GBP according to the statistic tool lost 873 pips this week while the JPY closed the week with a profit of 420 pips.
The mover of the week wast the Gbp/Nzd with -1277 followed by the Gbp/Jpy and Gbp/Aud with -1174 and -1168 respectively.
The week is going to be light in news and everybody will focus on the world and bank leaders and their decisions on behalf the GBP. I will not suggest any trades for the GBP, EUR and JPY pairs, at least for the two first days of the week.
The Usd/Cad is ready for a short. Again we do not blindly go short, we check lower time frames and keep an eye on Oil prices, since the two of them are correlated. Another trading idea is long the Aud/Usd. For both trades we bet on a weaker USD, so again keeping an eye on the other USD pairs is also going to help us. If the Usd/Jpy goes higher 300 pips or the Eur/Usd drops 300 pips, all USD pairs get affected to a certain degree.

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