Scotland makes its historic vote on independence, and this is a big deal for the pound. We have already seen sterling fall and rise on any change in the opinion polls. And now, we are approaching the one poll that matters: the real results.
In case of the expected No vote, there is some room for the upside. In case of a surprising Yes vote, there is much more room to the downside. Here are the big levels to watch for this big event:
Updates:
Scotland officially rejects independence – GBP/USD sells the fact.
- Big update:Â Networks call the elections: No to Scottish Independence
-  No campaign on track for victory – is GBP/USD a “sell the fact�
- Initial signs of landslide No result send GBP/USD to higher range
- YouGov: 54% No 46% Yes – GBP/USD on the move to next resistance
Here is a daily chart of GBP/USD, which goes back to the middle of last year. An explanation follows:
GBP/USD big levels – click image to enlarge
In case Scots vote No:
The immediate level at the time of writing is the round 1.64 level, which was only temporarily breached on voting day, but remains intact. It is followed by 1.6465, which was a stepping stone for cable on its way up in March.
The next stepping stone is at 1.6540, and this was also a stepping stone on the way down, during August, as it cushioned the fall. It is followed by 1.6614, which capped the pair in late 2013 and is only weak resistance.
From here on, follows a description of higher levels which aren’t likely to be met in an event of a No vote, but could be reached later on:
Further resistance is at 1.6660, a level which the pair attempted reaching in August and also worked as resistance in early 2014. Higher, we have 1.6740, which worked as resistance in February and later as support in June.
1.6810 capped the pair several times in 2014 and later worked as support in July. 1.6920 was a clear separator of ranges as it worked as resistance in May and later as support in June.
The very round number of 1.70 is clearly a strong line 1.7060 follows before the multi year high of 1.7191.
In case Scots vote Yes
In this case, there is a lot of room on the downside.
1.6285 is the gap separator from September and the first significant support line. 1.6250Â follows after working as support early in the year and serving as stubborn resistance twice in 2013.
1.6160 served as support on the recent recovery and also worked as resistance in mid 2013. 1.6050 is the cycle low and the last stop before the round number of 1.60.
1.5905 supported the pair several times in the autumn of 2013 and is strong support. It is followed closely by 1.5850, the low of November 2013.
Further below, these are already free-fall levels:
1.5430 was a double bottom in mid 2013 and is strong support. 1.51 follows after taking the same role back in August 2013.
The very round number of 1.50 is the next obvious line. The last line is 1.4815, the low point in 2013, just as Carney came into office.
More on the big event:
- Scotland Referendum: Timetable for forex traders
- The case for Yes – 5 reasons why the polls could possible be totally wrong on Scotland
- Scotland Referendum: what the betting odds imply for GBP/USD
- GBP/USD could retest 2010 lows if Scotland votes to leave UK
- Latest podcast, which also includes the Scottish referendum
