UK Head Fake: Vote for Exit?

Burkhardt's picture

UK Head Fake: Vote for Exit?
Justin Burkhardt | FXFocus.com

Is Britain “drifting toward the exit”? That’s what British Prime Minister David Cameron is gunning for in his proposed referendum unless change occurs first.
 
In a meeting in London today, Cameron stated that there has to be “fundamental change” within the EU for the UK to remain a part of this Union. But he will likely not get the change that he is demanding…
 
The proposed vote is still 4 years out and is of course contingent upon Cameron being re-elect in the 2015 general election. Today’s pledge has done little to ease the tension that has been stirring and will likely further alienate the UK from the euro-zone.
 
Cameron is not the first to propose a referendum like this one. Greece’s former prime minister, George Papandreou, tried to play the same card back in 2011; within days he was overthrown by his own party.
 
It would seem very unlikely that Britain will actually follow through with an exit here given the economic benefit of being a part of this union. However, a recent opinion poll showed that a swelling camp of Euroskeptics ready to walk.
 
FOREX Insights
 
For the last week the GBP.USD has been in a downward spiral likely hit by a dampening of investor confidence in light of exit talks coupled with poor economic data streaming out of the region. The pair has fallen from a peak of 1.6383 to a low of 1.5800 and is now consolidating near the $1.5824 support level. What is the next play here, a continuation the current trend or an outright reversal?
 
These moves and moves like it are nothing short of significant and can be quite rewarding if you know how to gauge the market's sentiment. If you are ready to learn a tactical strategy for this market, let Forward Thinking be your guide.