Markets Flick to Risk Off

June 14, 2016

Image: Andrew Huff Flikr (cc)

Australian traders making their way back to their screens following the Queen’s birthday long weekend have been met with an all round risk-off sentiment across forex, indices and commodities to start the week.

GBP/USD Daily:
Click on chart to see a larger view.

With polls continuing to point towards a tightening of the Brexit race, the Pound was hammered coming into the weekend and then technical levels took over on the retrace Monday.

GBP/USD Hourly:
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The hourly Cable chart shows the retrace nicely, back into that previous support now acting as resistance. I really like this re-test as the TL resistance also lines up perfectly with the previous area of consolidation which is always a great spot for aggressive day-traders who are on the ball and in front of their charts to short into.

The Brexit referendum is on June 23. That’s next week! This isn’t just future risk anymore, it’s decision time and the latest ORB poll has the Brexit vote jumping out to a 10 point lead over the the Bremains!

Equities too are sliding into the decision as markets turn risk-off and flood into the relative safety of the Japanese Yen, gold and even Bitcoin! The Fed doesn’t want to come to the party and it just feels like we’re in the middle of a perfect storm.

Heck, USD/JPY is at its lowest level since October 2014! Paging Mr Kuroda! I have a feeling that this is going to be the theme of at least one daily market update this week…

FTSE100 Weekly:
Click on chart to see a larger view.

Staying in Britain and comparing the FTSE with big brother the SP500 which is also getting hammered off a confluence of higher time frame resistance, and you have another case of a few things all coming together at once to exaggerate the drop.

There’s plenty of levels in play or having just played out that you can manage your risk around across the market spectrum so let us know what you’re watching or trading with a mention on Twitter at @VantageFX.

Enjoy the week!


On the Calendar Tuesday:
AUD NAB Business Confidence


USD Core Retail Sales m/m
USD Retail Sales m/m

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Dane Williams – @VantageFX

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