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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

EUR/USD

Overview:
    Today Last Price: 1.1482
    Today Daily change: 13 pips
    Today Daily change %: 0.113%
    Today Daily Open: 1.1469
Trends:
    Previous Daily SMA20: 1.1429
    Previous Daily SMA50: 1.1385
    Previous Daily SMA100: 1.1474
    Previous Daily SMA200: 1.1623
Levels:
    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

 

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