GBP/USD Capped at Key Resistance Before 1.4346 Trend Line
GBP/USD
was initially dragged up on the crosses with GBP/JPY making a huge
rally as Yen got sold-off. GBP/USD has staged a continued upside effort
and headed for a break of key resistance.
It is Brexit week this
week and fifty-four percent of Britons would vote to remain in the
European Union while 46 percent would opt to leave. This is according to
an ICM telephone poll for the Guardian newspaper published on Monday in
the U.K.
The Guardian's website offers a poll but excluded those who do not know how they will vote in the June 23 referendum.
Imaginary/ (forecast) figures sent out by the Treasury
Meanwhile,
Chancellor Osborne analysis issued warning in a Times article as the
Treasury claims Britain's economy would shrink 6% by 2030 and would
leave UK ‘permanently poorer', costing every household the equivalent of
£4,300 a year.
Chancellor Osborne : Britain better off in the EUR
His
analysis, whether it be accurate from a man who continuously misses his
own targets, also states that the negative impact GDP would result in a
total reduction in tax receipts of £36 billion, equivalent to around an
8p increase in the basic rate of income tax while the UK is estimated
to be between 3.4% and 4.3% of GDP better-off within the EU rather than
with membership of the European Economic Area. The UK is estimated to
be between 4.6% and 7.8% of GDP better off inside the EU rather than
with a negotiated bilateral agreement like Canada, Turkey or Switzerland
have. Finally, the UK is estimated to be between 5.4% and 9.5% of GDP
better off inside the EU rather than adopting the rules of the World
Trade Organisation like Russia or Brazil.
GBP/USD levels
In
the broader picture in the charts, GBP/USD remains capped by the 2016
downtrend at 1.4280 / 1.4346. Recent highs above there come as 1.4457,
then the 1.4568 April 2015 low and the 1.4665 February 2016 high. While
below these levels, the price remains in a bearish trend, as suggested
by Karen Jones, chief analyst at Commerzbank.
"Support lies at
1.4085/05, a close below here should trigger losses to the 1.3837 29th
Feb low. Our negative bias and downside target remains the 1.3502 2009
low. Below 1.3500 our primary target will be 1.2750, the 78.6%
retracement," Jones added in respect to the downside.