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GBP/USD volatile, FTSE called higher as Brexit debate heats up

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Feb 22, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

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    GBP/USD now trades volatile around 1.4280 following a sharp fall in early Asia, while FTSE is seen opening higher as odds of “Brexit” increased slightly after London Mayor joined ‘leave camp’.

    Volatility confined to currency markets?

    FTSE futures have opened up bid and are trading up 0.6%, completely at odds to the move lower in GBP, indicating the volatility as of now is restricted only to FX markets. The odds of a Brexit are still low around 35%. Still, London Mayor’s move to “leave group” has led to a spike in volatility.

    With no major UK economic data due for release, the currency pair remains at the mercy of the Brexit related news flow.

    GBP/USD Technical Levels

    The immediate resistance is seen at 1.4304 (61.8% of 1.4079-1.4668), above which the spot could target 1.4322 (5-DMA). On the other hand, a breakdown of immediate support at 1.4235 (Feb 17 low) would open doors for a slide to 1.42 levels.
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