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Brexit vote is bad for the Euro too – SocGen

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Feb 23, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

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    Kit Juckes, Research Analyst at Societe Generale, suggests that the ‘Brexit’ would be bad for UK growth and the countdown to the vote on June 23 is bad for investor confidence and therefore, the pound.

    Key Quotes

    “We remain bearish, of GBP/NOK, GBP/JPY, and GBP/USD for that matter. There will be corrections as move gets stretched but they’ll be chances to sell, at least until June 22.

    Brexit, however, isn’t just bad for the UK. It would have negative growth implications for the rest of Europe, and more importantly could cause wider political uncertainty. So far, the response to any market signs of loss of confidence in the Euro Area has come from the ECB and that isn’t likely to change.

    That in turn, is negative for the Euro, which this morning is sitting just above key psychological support at EUR/USD 1.10 and above the bottom of the uptrend of the last few months at 1.0950 or so. I suspect that a break of 1.10 will see an acceleration downwards for EUR/USD, while a chart of EUR/JPY looks even more negative in the short term.”
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