September 18, 2014
Will The GBP/USD Be Back Above 1.6500 By The End Of The Week?
The Scots are taking to the polls today to vote yes or no to Scottish independence, but outside of the UK it is forex traders who will be keeping a close on eye on the result because this is likely to have a big impact on the movement of the GBP pairs in particular.
A 'Yes' vote will certainly have the biggest impact because could send the GBP plummeting. It's hard to say by how much because this is very much a one-off event, and there is still so much uncertainty surrounding what currency will be used in an independent Scotland, but we are likely to see a big sell-off.
The more likely outcome, according to both the opinion polls and the general consensus amongst all of the bookmakers, is that a 'No' vote will ultimately win through in the end.
This is sure to bring some much-needed strength back to the GBP after it has fallen sharply in recent weeks. The big question is whether this is currently priced in with the GBP having bounced back a little in the last week or so, or whether it will gap up after a 'No' vote is announced.
I'm going to stick my neck out and say that a 'No' vote is almost a certainty. As I said yesterday on Twitter, if there was still any doubt in people's minds, Gordon Brown's barnstorming speech should have been enough to push people into the 'No' camp.
As a result, I can see the GBP going up as a result, and to answer the title of this post, I wouldn't be at all surprised to see the GBP/USD pair sitting above the 1.6500 level at the end of the week.
This is just my personal opinion of course. I haven't yet backed this up with any trades on the GBP/USD pair, or indeed any other GBP pair, however as I pointed out in yesterday's blog post, there are some prices on some of the binary markets that are looking quite tempting, particularly the binary quote of 14.8 - 27.7 for the price to close the week above 1.6525.