London Forex Report: Brexit Brings Out The Bears, Sharp Overnight Risk Reversal

London Forex Report: Brexit Brings Out The Bears, Sharp Overnight Risk Reversal

London Forex Report: UK Brexit confirmed in the early hours devastating risk assets across global markets. Central banks are now on alert to manage the ramifications of the shock results. Wild moves in FX markets overnight with GBPUSD plummeting over 10% after registering new year to date highs above 1.50 testing 1.30 in early European trade. The USD Index strengthened considerably during Asian trade boosted by safe haven flows. A volatile day is expected ahead as US Index futures are ‘limit’ down.

FX Majors: EUR reversed its early gains as early results from the UK’s vote on European Union membership showed the “Leave” camp holding the lead. EURUSD dropped from highs of 1.1430s to as low as 1.09 early this morning. GBP 10% reversal to test low 1.30’s continued volatility expected as official reactions to result roll in JPY surges testing bids below 100 benefiting from safe haven flows. BOJ on alert

EURUSD
Outlook: Short Term (1-3 Days): Bearish – Medium Term (1-3 Weeks): Bearish

Technical: Sharp reversal overnight. Next downside level to watch is 1.08, with 1.10 near term resistance now.
Retail Sentiment: Bearish
Trading Take-away: Sidelines

GBPUSD
Outlook: Short Term (1-3 Days): Bearish – Medium Term (1-3 Weeks): Bearish

Technical: Sharp reversal overnight. Next downside level to watch is 1.30 with 1.38 near term resistance now
Retail Sentiment: Neutral
Trading Take-away: Sidelines

USDJPY
Outlook: Short Term (1-3 Days): Bearish – Medium Term (1-3 Weeks): Bearish

Technical: Sharp decline overnight. Next downside level to watch is 98.00 with 104 near term resistance now
Retail Sentiment: Bullish
Trading Take-away: Sidelines

EURJPY
Outlook: Short Term (1-3 Days): Bearish – Medium Term (1-3 Weeks): Bearish

Technical: Sharp decline overnight. Next downside level to watch is 107 with 115.50 near term resistance now
Retail Sentiment: Neutral
Trading Take-away: Sidelines

Commodities FX: GOLD fly’s boosted safe have flows printing fresh year to date highs. Oil (July contract) falls amid risk aversion as demand concerns are heightened with uncertainty coming from UK shock result to leave EU AUD driven lower by sharp reversal in risk sentiment and heavy cross selling in AUDJPY. CAD weakens as USD bid on safe haven flows amidst global uncertainty.

AUDUSD
Outlook: Short Term (1-3 Days): Bearish – Medium Term (1-3 Weeks): Bearish

Technical: Sharp decline overnight from symmetry swing objective. Next downside level to watch .7230 with .7500 near term resistance
Retail Sentiment: Neutral
Trading Take-away: Sidelines

USDCAD
Outlook: Short Term (1-3 Days): Bullish – Medium Term (1-3 Weeks): Bearish

Technical: Sharp reversal overnight next level to watch on the upside is 1.32 with 1.27 near term support now
Retail Sentiment: Neutral
Trading Take-away: Sidelines

XAUUSD
Outlook: Short Term (1-3 Days): Bullish – Medium Term (1-3 Weeks): Bullish

Technical: Sharp reversal higher next level to watch on the upside is 1390 with 1303 near term support now
Retail Sentiment: Bearish
Trading Take-away: Sidelines

USOIL
Outlook: Short Term (1-3 Days): Neutral – Medium Term (1-3 Weeks): Bullish

Technical: Only a close below 46 threatens medium term bullish bias, below .46 opens a test of 44 as next downside objective
Retail Sentiment: Bearish
Trading Take-away: Sidelines

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