GBP falls to 31 year low after Brexit

GBP-USD-weekly-chart-20160705233135

2 weeks after Brexit, the GBP/USD falls to 31 year low of 1.2952 today. Please see this GBP/USD weekly chart to understand how the GBP has suffered from Brexit decision. Most economists and investors had been warning the British people of this situation if they chose Brexit and yet 52% of British voters chose Brexit after buying into the misleading stats and promises given by the Leave campaign. It is amazing how an educated country could make such a rash decision. I think it is arrogance by a small majority of British people that Britain doesn’t need anybody else to prosper economically. Unfortunately, the 48% people who voted to remain with the EU understood this but they were a pushed into a minority. Brexit is a reminder that illogical and stupid decisions can be taken in a democracy by misleading campaigns. Coming to forex trading the GBP/USD, the short trade makes sense till something changes fundamentally with the UK. So we can remain short on GBP/USD with stop loss at 1.3200.

References:
www.investing.com/analysis/brexit-fallout-worsens,-sterling-at-30-year-low-200140067
www.finance.yahoo.com/news/brexit-direct-democracy-referendums-000000954.html

 

EUR/USD Technical Analysis – 07Sep2015

The Euro is looking to recover ground against the USD after falling in recent days. However, the recent stability around 1.11 (our old target that good solid profits), is temporary, and we can expect a big move, at least 200 pips, in EUR/USD either on downside or upside in the coming days, most likely around Sep 17, the day of US Fed Interest Rate Hike communication, which will cause big moves.

Currently at 1.1164, theEUR/USD is a Sell or Avoid, but not a Buy. As of today, EUR/USD Technical Analysis says that EUR/USD becomes a Buy above 1.2

 

 

RBI Forex Reference Rates – 30Apr2015

As on 30-Apr-2015 13:50:00
Underlying RBI Reference Rate
     1 $ 63.5780
     1 £ 97.9864
     1 € 70.5334
     100 ¥ 53.5300

The Euro is recovering well after steep losses in the last 3-4 months. Recovery of the Euro is positive for global economy as it indicates release of some hoarding pressure from the US Dollar, and willingness of investors to move back into other currencies. Good upside visible in the Euro even after the recent rally. EUR-USD target 1.22 and EUR-INR target 74.

 

Bonus Trade: Buy EUR/USD for Target 1.22

Looks like the US Fed policy statement today has ended the USD rally, and we could see solid short covering rally in EUR because the shorts are rushing to square off their position today. Today is the first day of clear BUY signal, so this long Euro trade should go on for next several days. Buy EUR/USD for Target 1.22, and 1.30 is also possible depending on the momentum of short covering and if we get some positive economic news from the Eurozone in next 2-3 weeks.

eur-usd-chart-18mar2015

 

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