Next week, is a key week for a nation deciding its fate. Yes, I am referencing to the referendum dubbed as the so called ‘Brexit’. The term Brexit refers to the notion that the people of United Kingdom will participate in the referendum being held on the 23 June 2016 to make a decision whether the UK remains a member of the European Union or decides to leave.
Investors have been watching the situation develop very closely and it will be a key week for the markets and in particular for the Forex markets and the currency pair GBPUSD.
Lets take a look at the charts for they major currency pairs.
EURUSD is stuck in a trading range. A good close above 1.4125 leads to higher prices. A good close below 1.1160 leads to the target of 1.0960.
Cable and GBP related crosses will be in key focus net week due to the Brexit. From the technical perspective, a good close above 1.4550 targets 1.4870. Downside target remains between 1.3700 – 1.3500.
This currency pair has been in a strong downtrend. Taking a look at the weekly chart of USDJPY there is more downside into play.
USDCAD had been pretty highly correlated to the Crude Oil market which formed a bottom around the $26/bbl level to rise into the $50/bbl level. The Crude Oil market has softened a little bit and USDCAD paused from falling further and rallied from the key pattern formation. USDCAD could rally to the 38.2% Fibonacci retracement around the 1.3300 mark as illustrated in the chart below.
USDCAD weekly chart:
USDCAD daily chart