The British pound climbed more than 100 pips from our long-entry after latest polls show growing support for the 'Remain' Camp in the June 23 referendum. As a result, the likelihood of a Brexit has significantly diminished and that’s currently helping the pound to regain some strength. We now see a next target at 1.4635 before a correction is becoming more likely. However, above 1.4665 we see a higher likelihood of further upward swings towards 1.47.
Nonetheless, the current market environment leaves much to be desired and given the listless price development it remains difficult for traders to take advantage of the muted market conditions. Even though the market should be repricing the prospects for higher interest rates in the USA, investors became far more risk-averse and showed reluctance to invest. So we will have to wait for an increase in risk appetite among investors in order to benefit from larger market movements and new trends.
Market participants await U.S. data on housing today for clues on the health of the economy. In the meantime, Fed policy makers continue to reinforce the likelihood of imminent rate increases with Fed President Bullard saying that he doesn't see the U.K.'s vote on EU membership influencing the FOMC meeting that will be held the week before the referendum. Traders are currently pricing in a 30 percent chance of a rate hike in June and a 48 percent chance for a July hike. The focus could thus be on strong economic data, such as U.S. New Home Sales, scheduled for release at 14:00 UTC. If data fails to impress the dollar could weaken.
Here are our daily signal alerts:
EUR/USD
Long @ 1.1276 SL 25 TP 30-40
Short @ 1.1190 SL 25 TP 30, 60
GBP/USD
Long @ 1.4510 SL 25 TP 30-40
Short @ 1.4470 SL 25 TP 30, 60
We wish you good trades and many pips!
Disclaimer: Any and all liability of the author is excluded.