Rollercoaster ride for GBP next week as the no vote is back in the lead

The pound kept its gains after a YouGov poll last night showed a swing back to a ‘no’ vote for a Scottish independence. This looks likely the main source of cable trading until the referendum next Thursday. Currently trading around the 1.6230 level, after a few drops down to 1.6160, cable seems to have stabilised here until we get more news from Scotland.

The euro has been in a tight range this week with little to excite it. It has been helped along with the fall in cable from the Sunday open via EUR/GBP on weak GBP and  EUR/CHF. The SNB announced that negative rates could be used to help keep the cap in place causing a sell-off in CHF. EUR/CHF is currently capped at 1.2000 and is trading at 1.2100.

USD/JPY is on a charge. Even with the geopolitical tensions still in full force, JPY is not acting as a safe haven. We are seeing six-year highs currently above the 107.00 level, with a high of 107.39 printed overnight. We did have a brief dip below 107 yesterday when Kuroda said, tools available but no plan to ease now, which caused a sharp sell-off of around 40 points. This showed  what the traders were expecting from Japan, but this has been recovered overnight and is still looking very bid.

USD is the overall winning currency this week, gaining against most pairs, with speculation on the Fed rate rise as the economy is still performing in line with expectations. Today this looks set to continue as retails sales is due, and expected to rise to 0.2% from 0.1%. We are also expecting an improved UoM consumer sentiment to 83.2 from 82.5.

EUR/USD

Supports 1.2895 1.2869 1.2841  | Resistance 1.2950 1.2978 1.3005

USD/JPY

Supports 106.77 106.42 106.21  | Resistance 107.33 107.54 107.88

GBP/USD

Supports 1.6196 1.6145 1.6105  | Resistance 1.6287 1.6327 1.6378