UK votes to leave
Final announcement for UK’s EU Referendum is expected in 1 hour but some mainstream media channels are already reporting a win for the Brexit camp.
Brexit referendum: Farage ‘declares victory’ as pound plummets to 1985 low
In my unqualified opinion, this is short term pain for UK but the right thing to do. By leaving, they can restructure and firewall themselves against the runaway debt and immigration disaster that EU is becoming. One thing is also certain: a nation must not hand over its sovereignty to someone else – certainly not to a council/committee/whatever of bureaucrats sitting in another country that is not elected by the people.
Early signs already?
Those of you who have followed my seminars I have often observed that SGD is a very good early indicator. It’s qualities was addressed comprehensively in this post (log-in required). Now perhaps this is a coincidence but what-if, just what-if USDSGD already priced in the Brexit outcome since last night?
UK may not leave EU on Brexit vote
But before Brexiters get carried away in their euphoria, there is one matter that they have to sort out. From Business Insider
There is a conspiracy theory that a Brexit won’t actually happen if the public votes for it
A really crucial detail about the upcoming EU referendum has gone virtually unmentioned and it is probably the most crucial detail: Parliament doesn’t actually have to bring Britain out of the EU if the public votes for it.
That is because the result of June 23 referendum on Britain’s EU membership is not legally binding. Instead, it is merely advisory, and, in theory, could be totally ignored by UK government.
Fortunately that is for politicians, British voters for another day. My own interest is the market and these three charts describe today’s event in the best way.
3 charts that define market today
GBPUSD at 30-year low, bearish momentum may continue
GBPUSD weakening reflects negative sentiment and uncertainty in the currency
GBPUSD weakening reflects negative sentiment towards divorce with Europe and uncertainty in the currency. Traders must decide if this is a sustainable momentum move. Investors must decide if this is a generational low. Residents in UK to reflect whether they should have kept some gold, foreign currencies for rainy day.
GBPJPY down 15%, not a sign of stability
GBPJPY move today must qualify for some kind of Guinness World Record somehow for number of pips moved. However very large moves are not signs of stability. Recall several incidents in 2015 such as 15 Jan when SNB removed CHF from EUR peg, Black Monday 24 Aug, etc.
GBPJPY down 15%
GBPUSD bull trap!
And lastly as I stated yesterday
Resistance remains valid until broken. Traders should not lose sight of what charts are printing. Poll results, headlines keep us informed but also distract us from the most important thing: what price is printing. If we lose sight of important facts, we will realise that Brexit or not, there will still be a UK after the referendum, that the state of the economy hasn’t changed (not enough in 2 weeks anyway), that we have been taken for a ride.
GBPUSD long before EU Referendum turns out to be big bull trap
Resistance zone in pink in this chart was described here. Year to year down trend for GBPUSD remains intact. That former support for 2015 remains resistance. Entire fortunes won and lost today.
The following two tabs change content below.
Soh Tiong Hum is Director of TerraSeeds Market Technician Pte Ltd. TerraSeeds is a trading educator in Singapore since 2005.
Soh's Twitter account @sohtionghum
was ranked #23 out of The Top 70 Twitter Accounts To Follow In 2015
"I do not have a financial advisor's license. I am not qualified by any regulator to give financial advice. I do not know you the reader. Your investment means and motive may be different from me. My posts here are based on observations and meant for education. I am not responsible for for any consequence from your actions."