Why Brexit vote was expected from the point of view of the Technical Analysis?
Please, be advised that this article is not an investment advise, it’s an educational material. Any trade may lead to total lose of capital.
Looking on GBP/USD Monthly chart (chart 1) we can see the AB channel (black lines) which started forming on the April 2009 when was clear that the UK economy continued to decline dramatically with statistics showing 2.4% rate of contraction for the first quarter of the year. The channel continued till the Jan 2016 when it broke on 1.4525 and confirmed on the Feb 2016 when Cameron confirmed the date of the EU Referendum. There the approximately 0.265 width channel was broke heading to approximately 1.2 (1.4525-0.265=1.1875) which is going to be reached by the March 2018 if Brexit is going to happen, which is not likely to happen as is against US geopolitical interests. In any condition, regardless the likelihood of Brexit the GBPUSD exchange rate is going to reach the 1.285-1.29 exchange rate on the end of September and start of October 2016 when the uncertainty is going to stop and the markets will move to the certain direction depending on the results, to the 1.2 by the March 2018 or to 1.46 by November 2016 in case of UK remaining in the EU. In that case the GBPUSD will continue towards 1.39 which will be reached by July 2017 and the CD channel (red lines) will be broken then and the exchange rate will continue towards 1.5+ which will be reached in the first quarter 2018. The levels are calculated with Gann and Fibonacci Fans (Blue and Green lines) which we will discuss in our future articles to make it clear how we got those weird numbers 😀
Chart 1: GBP/USD exchange rate Monthly chart
Why Frexit (the French EU referendum) is going to happen as Marine Le Pen is going to win the French presidential elections.
Populists and liars are winning the heart of the mainstream as history and particularly Brexit Leave campaign success shows. The same is going to happen in France as the “far right” eurosceptic candidate for presidency, the Marine Le Pen is going to use the methods of Boris Johnson to win votes. Particularly she is going to win votes promising EU referendum as a resolution of the made up issue of immigration and imperial ambitions of not very intellectual part of society. The win of populist candidate is visible on the EUR/USD (chart 2) and EUR/JPY (chart 3) exchange rate Monthly charts.
The conclusion is made as the French presidential elections are going to be between the 23rd of April and 7th of May and at the same time-frame the EUR/USD exchange rate is going to reach the parity, so the 1 EUR will be equal to 1 USD and the EUR/JPY exchange rate will be approximately 109 as well as USD/JPY (Chart 4) exchange rate.
Chart 2: EUR/USD exchange rate Monthly chart
At the same time we can see on the chart the Triangle chart pattern (black lines) which was broken on the January 2015 and shows that the EUR/USD exchange rate is going to reach the rate of 0.8 USD for 1 EUR by the March and April 2018 as, most probably the Frexit referendum is going to happen then and Leave campaign is going to win.
The dates of Marine Le Pen wining the presidential elections are confirmed on EURJPY chart too as well as the date of Frexit referendum.
Chart 3: EUR/JPY exchange rate Monthly chart
As it’s very unwanted to happen, we tryed to confirm the forecast on USD/JPY chart with use of Gann fans and Fibonacci levels only. Unfortunately, the forecast is confirmed and on April-May 2017 the USD/JPY is going to reach the exchange rate of 109 and on the March-April 2018 the exchange rate will reach 120 what totally confirms the EUR/USD and EUR/JPY exchange rates (if we make a cross exchange rates using the EUR/USD and EUR/JPY forecasts, we will get results equal to USD/JPY forecasts what, unfortunately, confirms the reliability of the forecast).
Chart 4: USD/JPY exchange rate Monthly chart
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