The British pound traded lower against its major trading partners after fears grew of a Brexit outcome gained momentum. Earlier in London, Ladbrokes noted the odds for leaving the EU grew from 21% to 27%. While the general consensus is for the UK to stay in the European Union, many polls have seen a shift in polling towards the Brexit outcome, with some polls having it a 50/50 call.
The UK May manufacturing reading moved back into expansion with a 50.1 reading, beating the analyst consensus of 49.6 forecast. The news was not all positive as both April Consumer Credit and Mortgage Approvals came in lighter than their forecasts.
Price action on the GBP/USD daily chart shows the rally that stemmed from a bullish Gartley pattern on May 16th appears to be over. The recent weakness is tentatively finding support from the 50-day SMA. If this level breaks, we could see price target the 1.4350 region. It is around that area that price could form a double bottom with what was point D of the bullish Gartley pattern. If we see the remain camp gain momentum again, we could see sterling target the 1.46000 area.
If bearish momentum accelerates, Major support will come from the psychological 1.40 handle.
The trade: Sell GBP/USD at 1.4450 with a stop loss at 1.4475 and a take profit at 1.4350. The Risk/Reward Ratio is 1:4