BombayBulls

Brexit - Calm Down And Carry On - 6/23/2016

FX:GBPUSD   British Pound/U.S. Dollar
Finally today is the day when over hyped and exaggerated event - Referendum for Brexit - will start. We are closing or have closed all our positions because of event as well as liquidity risk. There is no point in carrying positions during the madness which may ensue the event.
We are still firmly in dollar selling camp, which is evident from our positions and preaching. Here is a quick recap of what we think about major pairs.
EUR/USD             - Expecting 1.1600 in coming sessions but today we are closing it at 1.1340.
AUD/USD             - 0.7600 was the initial target when we got long near 0.7200 / 0.7300 but now it is close to 0.7550 and there is no point in being a dick for few pip.
NZD/USD             - It was looking a bit tired so we closed major part of the position around 0.7100. But as you know, kiwi is confounding most traders lately with its resilience and final target of 0.7250 can be breached today. We don't want to wait for that because unexpected exit polls can start coming anytime and ruin the party so closing it right here ~ 0.7190.
GBP/USD             - We were able to profit from initial Brexit madness by buying it near lows ~ 1.3900. But this pair has been excommunicated lately because of drastic change of events. Finally we are glad that it is going to be over and we will be able to trade our beloved ( because of its good pip range ;) ) pound pairs from next week. No long or short bias as of now. Just wait and watch how things come out on Friday.
Now few words on Brexit.
As we have said before, 'Experts' talk like UK is going to detached from Euro             continent and start floating somewhere north in frigid Arctic Ocean if Britons vote to leave EU. Nobody is going to turn into zombies no matter on what side they vote. This is how media works, by sensationalizing the things out of proportion. You won't be invited to speak on main stream media if you talk sensible. Only sound bites they are interested in are those which generates fear and anxiety. Entire circus has been so much hyped that for someone outside solar system it looks like, UK land is being detached from the earth and will end up somewhere on Mars. Then there are banks, who don't even know what is the 'tempest in a tea pot' ;) . Well, the one which you believed was not, but here it is Mr. CEO             . They are coming up with number like, pound may devalue 11.3 % and 10.8 % and bla bla bla. Well here is our number, 8.2 %, without paying someone million dollar payroll. The fact is nobody knows what's going to happen. So any number is total BS. News is that banks are asking for traders to do extra shift. Well why don't you instead declare a bank holiday and save some money for shareholders ! Because in fact their presence will create more madness and ridiculously volatile environment. Instead, take a break, learn what it means over the weekend and come prepared on Monday ! This is the far better solution than any other expensive consulting firm is going to provide to those banks ;)
Basic psychology of market tells us that known events hardly cause the disruption or enthusiasm as advertised. It is the surprise which throws market out of kilter. And here there is no surprise that in any case, both sides will be as confused as they are right now. In more than a month's time if people ( including so called 'Experts' ) can't conjure up single sensible sentence which depicts what is the benefit or loss of voting for either side then what are the odds that they are going to have revelation in a day!
So just calm down and carry on! Still the sun is going rise from east and media will get a new bone to chew on. Looks like the entire over hyped event is going to be a dud and market will not be as volatile as expected. And as we said, only happy ending is that finally we will get pound pairs to trade without constant fear of unwarranted volatility.
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