Please don’t Go ! (June 11)

Joel Adams’ song (or KC and the sunshine band for the older like me) was used as cover title on Germany’s SPIEGEL magazine. They urge British people to stay in Europe. I think the reason is the last poll from the Independent that clearly gives the lead to the Brexiters. Without giving the possibility to answer “Do not know” the result is 55 – 45 in favor of the Brexit. Younger people are willing to stay but are not willing to vote compared to older people that are not willing to stay in Europe but will definitely vote.The GBP was the loser of the week with -319 pips which is better than the loss of 458 pips the week before. There are forces pushing on both sides and when central banks intervene there is no way to predict the distance the pairs will move. I will not suggest any trades for the GBP pairs and to the Euro pairs to a certain extent.

The NZD was the winner of the week with 199 pips followed by the CAD with 172 pips. Cad performance is mainly due to an increase in Oil price that started the week by moving higher but on Thursday and Friday gave back all profits to finally form a doji candle that is somehow bearish and could push Oil prices lower. Gold is the real winner for the last two weeks since it managed to gain 65$ in just 6 trading days.

By avoiding GBP and Euro pairs we are left with few pairs to trade. I would suggest longs on Usd/Jpy and shorts on Usd/Cad. For the later we should go to lower time frames and wait for clear reversal signs since the absence of an upper wick on Friday’s candle, indicates strength for the pair. Aud/Usd is also expected to move higher but again after seeing signs of reversal.

Important news are expected next week. Monday and Tuesday will be relatively calm, but on Wednesday Claimant count for the GBP, FOMC and funds rate for USD. On Thursday employment from Australia, a press conference from the Bank of Japan about the monetary policy, GBP official bank rate (not expected to change) with the inevitable monetary summary and finally the Philly Fed manufacturing index. Friday is reserved for Mr Draghi and a speech in Munich where he will certainly have a word for the UK referendum.
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