1 month for the Brexit referendum (May 21)

I found an interesting page in the Economist concerning the Brexit. They produced an interactive poll tracker where different filters can be applied. Interestingly only the UKIP shows a clear preference for leaving the EU, conservatives also favor the “Out” despite Mr Cameron’s preference to stay. The rich also prefer to stay in the EU and it would be logical to expect that rich people are conservatives. On the other hand poor people are pro Brexit, while the Labor party is clearly against it. Does it make any sense? No.
A poll from ORB showing an “In’ lead by 15% sent the sterling  up to a 2-1/2 year high against the Euro, while a new poll from TNS that came out few hours later and gave a 3 point advantage to the “Out” left the market indifferent.
As a result of the above, I would suggest caution with the GBP for the next few weeks. As we can see from the analysis, prices remain inside “acceptable” borders, but we will see unexpected moves in both directions.
The Euro is a safer choice since it remains under pressure, idem for the Jpy. The Usd/Cad moved higher despite an increase in Oil price and is currently testing the emas and I would not be surprised to see it dropping again.
Watching the individual pairs we observe an increase on Gbp/Usd, Gpb/Aud and Gbp/Jpy mainly because of the referendum and those pairs could make moves in any direction. Trade them with caution or avoid them.
Eur/Usd is trading at support and could break it but most probably will bounce, Eur/Jpy is ranging and could move lower and test support. Idem for the Eur/Aud.
Usd/Jpy is also a “safe” choice. It has a 100 pip buffer before testing resistance and could be traded long for small profits.
This week is going to be quiet. We do not expect important news and apart from knee jerking moves from the GBP pairs, I do not expect anything dramatic.

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