Brexit and What It Means for the Financial Markets

Highlights About BREXIT

The events last week of Brexit were a significant event. Everyone should keep in mind that  nothing will happen immediately, and we are talking years before an actual “Brexit”.

The real consequences for a major Euro blow up rests with what France and Italy decide to do with their own EU membership. This can have a big impact in news headlines over the coming months.

While the British pound dropped by the largest amount in decades, it’s the euro that really should be much lower, and this may be an opportunity for swing traders.

Investors should be really cautious in gold, it is extended, in a high window technically and is due for a correction.

This should not affect non-EU multinationals, so U.S. market reactions are exaggerated.

It will take YEARS for Brexit

It will take years for the UK to exit the EU as trade negotiations are done and some of the logistics are worked out. This suggests the declines in the US and Asian markets are overdone.

The British Pound dropped and not the Euro?

2016-07-03 GBPUSD 4HThe fact the British Pound (GBP) has dropped by over 1827 pips, the largest amount in decades.  Technically it is at support now, but has more downside to go onto the 1.26 area.  The Euro is the currency that should be impacted as the risk of Brexit is related to  the continuation of the EU. This represents an opportunity for swing traders in the coming months.

GOLD is set up for a CORRECTION

Speculative gold longs are at all-time highs. This is generally not bullish as it means there are few traders left to come into gold – and a lot of potential to exit if anything makes traders jumpy.

2016-07-03 GC 1HGold is overbought right now and there is simply not enough physical demand to provide a cushion if  traders unloaded their holdings. The consequences of Brexit are minimal until we see dates and decisions in EU countries to leave the Euro. This will take time to unfold.

There will be much better entry prices for gold in the near term future.



Written by:

Stan Nabozny

Stan is a 20 year retail trading veteran, CTA (Commodity Trading Advisor) and Co-Founder of The Art of Chart. His specialties include using futures and options to trade Energies, Precious Metals, Equities, Currencies, Bonds, Softs, Grains and other commodities. Stan believes that Risk Management and Trader Psychology are more important that technical analysis and spends his time teaching and coaching other traders on these topics. Stan uses various trading systems and technical analysis approaches that integrate time and price in his work. See his latest articles here and

27th Jun 2016

Leave a Comment

Your email address will not be published. Required fields are marked *