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Spurning Sterling

Spurning Sterling

The chances of a Brexit appear low, at least judging by the more reliable phone polling as opposed to the self-selected internet polls. However, the uncertainty in the lead of to the June 23 referendum in Great Britain could weigh on the pound – and a fall from current levels would breach important technical levels.

20160415 gbpusd

Note only would a drop through 1.4130 break out of the triangle, it would also cause the MACD to roll over. This combination of signals may give traders more confidence to enter (or stop-enter) a sell at 1.4115, with a stop loss around 1.4210.

The target is a little more problematic. There is little recent price history at current levels, or below. In fact, sterling has not traded here since 2010. The post GFC lows close to 1.3500 may be an eventual target, but another approach could employ a trailing stop loss set at the original 95 point spread between entry and fixed stop.

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