June 22nd 2016: Strong UK Data Underlines Pound Stability

• This morning, as Britain enters the final day of EU referendum campaigning, the pound is showing signs of stability. The GBP/USD is holding Monday’s gains, while the EUR/GBP is at the lows. The move has been helped by yesterday’s better than expected public sector net borrowing figures.

• The euro is holding up well though, with solid German ZEW economic data yesterday.

• The US dollar is trading lower this morning, in line with the USD/JPY continued weakness.

• Coming up today we have Canadian retail sales at 13.30.
• This is followed by Fed chair Yellen testifying at 15.00 and crude oil inventories at 15.30.

Trade Idea: 

• The USD/JPY has been under pressure this month as Brexit uncertainty feeds an ongoing fight to quality. If UK votes to remain, we could see a releasing of this pressure and the USD/JPY rising.

• A good way to play this is a HIGHER trade predicting that the USD/JPY closes above 106 in 14 days for a potential return of 184%.

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