Will the British Pound Collapse on June 23?
ORB Poll Says 55% of Britons Favour Brexit
In a slamming indictment of those believing that a Brexit was an impossible outcome, the latest ORB research poll with over 2,000 respondents showed some dramatic results. According to the ORB poll, 55% of Britons favour a Brexit and 45% prefer to remain part of the European Union. That there was a shift in majority sentiment is significant, because the overwhelming consensus leading up to this poll indicated that the UK was likely leaning towards a no vote with every passing day. However, respondents are deeply concerned about the impact a Brexit could have on the economy of the United Kingdom on a macroeconomic level, and a microeconomic level.
How Are Markets Reacting to Brexit Referendum?
In terms of geopolitical uncertainty, a Brexit poses the greatest challenge to the global economy. This has been confirmed by extreme levels of volatility on equities markets of late. Following the release of this latest poll, European bourses plunged. The CAC 40, the DAX, the Euro Stoxx 50, and the FTSE 100 index have all hit the skids as fears of a Brexit mount. One of the hardest hit casualties is the GBP. If the vote on Thursday next week turns out to be a no vote, the UK will begin taking steps to exit the EU. But it will not be an easy process extricating the United Kingdom from the European Union. It is wrought with legal nightmares, economic and political partnerships that will have to be severed and new relationships that will have to be forged.
Major Polls Show No Clear Outcome for Brexit Vote
Interestingly enough, a major Paul conducted by the Guardian newspaper, the ICM poll, had 3056 respondents (telephonic surveys and online surveys) and the leave campaign – the Brexiteers – led by upwards of 9%. Spread betting companies have seen tremendous betting activity on the Brexit issue and public opinion has flip-flopped in either direction. There simply is no clear winner at this point in time, as indicated by several major polls that have been conducted including the following:
- YouGov poll on 9/10 June – 42% remain and 43% leave, with 11% undecided
- Opinium poll on 7/10 June – 44% remain and 42% leave, with 13% undecided
- ORB poll on 8/9 June – 45% remain and 55% leave
- YouGov poll on 5/6 June – 43% remain and 42% leave, with 9% undecided
- ICM poll on 3/5 June – 43% remain and 48% leave with 9% undecided
Support and Resistance Levels for the GBP
The GBP has experienced unprecedented volatility against the USD in recent weeks. This has been evident in the currency cross exchange rates which show a sharp drop in the sterling following the latest ORB poll. The GBP/USD currency pair is currently trading at 1.41831, resuming its declines from Thursday, 9 June and Friday, 10 June. The outlook is bearish, with a speculative sentiment index (SSI) figure of 1.6708, with a 37% short sell rating. In terms of support and resistance levels, S1 is 1.4191, S2 is 1.4130 and S3 is 1.4004. Resistance levels are as follows: R3 at 1.4500, R2 at 1.4371 and R1 at 1.4303.
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