British Pound Waiting for Scottish Vote for Clues on Next Move

On Thursday, after a 307-year-old union with England and Wales, Scottish voters age sixteen and over will decide in a referendum that will ask the question: Should Scotland be an independent country?

Most opinion polls show more Scots want to remain in the U.K. than leave it, but enough voters are undecided to swing it either way.

The “Better Together” campaign says Scotland should remain part of a larger country that has a greater say in the world and can better withstand financial shocks. Voting “no” to secession would also ensure it keeps the British pound after the U.K. government ruled out sharing the currency with an independent Scotland.

From the technical perspective I did get a possible buy signal ( see the blue diamond in the chart below). My diamond indicators are an output of an extreme overbought/ oversold along with price action that suggests a good counter trend move. In this case we saw an extreme sell off starting July 15th , falling over 11 points, I think if the market can take the 162.65 level , the door is open for a move up to 164.81 and 166.14!

My recommendation ahead of the Thursday vote is one I normally don't make....Use short term options, like the ones expiring Oct. 3rd. My preference is to buy short term calls close to the money but some may actually look to buy both puts and calls in an attempt to benefit from a big move either way.

Either way this market will be moved by news and more important market interpretation of the news. In situations like this, the main thing is not to be right on the market but to create a good trading plan with a balanced risk/ reward strategy so when the action is fast and the kitchen is really hot, you won't need to make decisions but rather follow your game plan.

Disclaimer - Trading Futures, Options on Futures, and retail off-Exchange Exchange An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv Read this Term foreign currency transactions involves substantial risk of loss and is not suitable for all investors. Past performance is not indicative of future results. You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge, and financial resources. You may lose all or more of your initial investment. Opinions, market data, and recommendations are subject to change at any time.

About Ilan Levy-Mayer

Ilan Levy-Mayer has been a commodities broker for over 15 years, and holds an MBA in Finance and Marketing Marketing Marketing is defined as the business process of identifying, anticipating and satisfying customers' needs and wants.This is a crucial element of any operation or brokerage in the financial services space. Well-funded marketing campaigns are instrumental to the survival and longevity of these companies in an increasingly competitive industry.Within the forex space, marketers perform a wide range of functions to help procure, secure, or retain clients.In particular, newer forex brokers also have t Marketing is defined as the business process of identifying, anticipating and satisfying customers' needs and wants.This is a crucial element of any operation or brokerage in the financial services space. Well-funded marketing campaigns are instrumental to the survival and longevity of these companies in an increasingly competitive industry.Within the forex space, marketers perform a wide range of functions to help procure, secure, or retain clients.In particular, newer forex brokers also have t Read this Term from Hebrew University in Jerusalem. Ilan is currently the Vice President and a Senior Broker at Cannon Trading Company.

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