Barclays: Scottish vote a significant event risk for the market - eFXnews

FXStreet (Łódź) - The eFXnews team remark that Barclays sees the Scottish independence referendum on September 18 as an event posing a considerable risk for the market.

Key quotes

"While the polls still suggest ‘No’ votes ahead of ‘Yes’ votes, there has been increasing support for independence in recent polls. While actual votes in such referenda tend to result in lower support for independence than in the preceding polls, uncertainty around the final result has been mounting."

"We believe put option calendar spreads appears the best hedge against a ‘Yes’ vote, while the best option for clients expecting a ‘No’ vote is to sell short-dated call options, delta hedged, to benefit from the large implied volatility risk premium."

"GBP will likely rebound further in case of a ‘No’ vote, though we have already seen some rebound in the past few days, while a ‘Yes' vote should exert further downward pressure on GBP."

"Technically, Barclays thinks that short-term capitulation signals room for a bounce within the recent bearish move in GBP/USD."

"A move above 1.6285 would close last Monday’s opening gap and allow room for further gains within range toward targets near 1.6350."

"Resistance in the 1.6500/1.6560 area is likely to provide selling interest on upticks."

"Our downside targets are the 1.6000/1.6050 area and further out towards the range lows near 1.5850."

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