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GBP/JPY Forecast 19 Sep 2014

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GBP/JPY Chart 19 Sep 2014
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A sleepless night in Scotland, could topple the pound lower

It's all about a YES or a NO vote tonight. Scotland is voting in a referendum and the question is "Should Scotland be an independent country?" If we see the NO's win - the GBP/JPY pair is likely to continue its relentless rally to the upside and possible reach as high as 1.80, however if we see the YES vote take stage, we could be in for a very rocky ride.

If we look at the charts, the picture is simple - we have a support line around 177.38 currently which if broken would result in a very rapid and stark decline towards the base of the whole rally of the GBP/JPY pair experienced in the last trading sessions.

On the other hand a clear break above 139.00 will lead to a sharp rally which could result in a move towards 180.00 Japanese yen for one British pound very quickly. Our view is that the latter is more likely. So we would be buying daily calls if prices drop towards the 178 area as results start pouring in.

There is no telling of the outcome of the referendum at this point in time. The only exit poll which has been published was by YouGov, predicting a 54% NO vote and 46% YES. As the night goes on we will start getting results from different areas of Scotland.

There hasn't been much traction in YouGov forecasts in the past, and this is not a decisive result, because the survey has been made on previously surveyed voters. The statistics are attempting to measure whether there has been some shift of mood amongst voters.

For now we remain on the daily call side, however if you see a test of 177.30-50 we would be definitely reversing our position and establishing a daily put exposure for the expiry at the end of the day (and week). Sources from Glasgow close to Binaryoptionspost have stated that we could see a YES vote - that would be a major surprise.

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