If Leaving Me Is Easy
Today’s Spotlight Market
The countdown is on to the UK referendum on remaining in the European Union. The referendum is just ten days away on June 23. All the leaders of the major UK political parties support remaining in the European Union, but polling has shown a tight election.
Fundamentals
One recent outlier poll, however, shows a stunning 10-point lead for the Leave campaign. The uncertainty surrounding the campaign has caused the Pound Sterling to drop in recent trading. Many major economic organizations such as the IMF, the British Treasury, and the International Monetary Fund have warned about the consequences of leaving the EU. These forecasts include the possibility of recession, rising prices, a rise in unemployment, and a weaker Pound Sterling. The Leave campaign dismisses these claims as fear mongering. Markets don?t like uncertainty, and the implied volatility of the Pound Sterling/US Dollar has increased to 28.15%, almost approaching the 2008 financial crises level of near 29%.
Technical Notes? -? View Today’s Chart
Turning to the 3-month continuation chart, we see several bearish signs. The Pound Sterling is now trading below both the 20- and 50-day Simple Moving Averages (SMA). While the 20-day SMA is still above the 50-day SMA, the slope of the 20-day SMA is turning downward. 14-day Relative Strength Index is a mildly bearish 40.9253.
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