EUR/USD: Focus on Brexirt vote and EUR/GBP flows
- EUR/USD posted gains in Asia as risk-on pushed EUR/JPY higher.
- Brexit vote and the resulting action in EUR/GBP could influence EUR/USD.
- The market expects the vote to be defeated by a historically large margin.
- Draghi speech, due at 15:00 GMT, could also influence the EUR pairs.
The EUR/USD volatility could rise, as the Brexit vote is expected to yield big moves in the EUR/GBP cross.
The market already expects the motion to be rejected by a historically big margin. Notably, some defeat estimates are ranging as high as 200.. The downside in Sterling (upside in EUR/GBP), however, could be limited as the historic parliamentary defeat may have been priced in.
That said, the opposition party may call early elections if the vote if defeated by a big margin, leading to heightened political uncertainty and an uptick in the EUR/GBP and EUR/USD.
Sterling, however, could rise if the vote is defeated by a margin of 50 or below. That would mean UK's PM has sufficient support to try for a second approval, according to FXStreet Analyst Joseph Trevisani. Bauxite optimism will likely lift EUR/USD higher as well, although gains could be capped by the drop in EUR/GBP.
Apart from the Brexit vote, the EUR pairs could also take cues from the ECB President Draghi's speech. The common currency could pick up a strong bid if the central bank head downplays recent economic slowdown and focuses more on the wage growth.
EUR/USD Technical Levels
Today Last Price: 1.1482
Today Daily change: 13 pips
Today Daily change %: 0.113%
Today Daily Open: 1.1469
Previous Daily SMA20: 1.1429
Previous Daily SMA50: 1.1385
Previous Daily SMA100: 1.1474
Previous Daily SMA200: 1.1623
Previous Daily High: 1.1484
Previous Daily Low: 1.145
Previous Weekly High: 1.1571
Previous Weekly Low: 1.1396
Previous Monthly High: 1.1486
Previous Monthly Low: 1.1269
Previous Daily Fibonacci 38.2%: 1.1471
Previous Daily Fibonacci 61.8%: 1.1463
Previous Daily Pivot Point S1: 1.1452
Previous Daily Pivot Point S2: 1.1435
Previous Daily Pivot Point S3: 1.1419
Previous Daily Pivot Point R1: 1.1485
Previous Daily Pivot Point R2: 1.1501
Previous Daily Pivot Point R3: 1.1518