The vote is in, and Scotland is staying in the United Kingdom. In the currency markets, the GBP was gaining heading into the vote, which reflected anticipation of a “NO” result. Now that the vote is over we are seeing GBP-faded. But what does it mean in the GBP/USD and EUR/GBP? Let’s take a look.
The GBP/USD rallied ahead of the vote, in anticipation that it will be a “NO”. Now that the polls have confirmed the no, the pound is sliding, and the GBP/USD is remaining bearish. It has the 1.62 handle in sight, then a break below that opens up the 1.6052 low and possibly even the 1.60 handle. EUR/GBP on the other hand is showing more GBP-strength, so it is remaining bearish, breaking below a 2-month consolidation to a new low on the year. If it can hold below the 0.7950 level, it should remain bearish with downside risk toward the 2012-low at 0.7764.
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