Chart of the Day: Pound v Euro

The Project Fear strategy may have been the reason that Remain failed, but so far it was spot on as far as Sterling collapsing is concerned. That said, the “Pound in our Pocket” tanking will only have positive effects on the economy and may even prevent a recession…

Pound/Euro: Below €1.20 Risks €1.12

Anyone who was pummeled earlier this decade by the collapse of property prices in Southern Europe may have a last chance at salvation of sorts if the present collapse in Sterling versus the Euro continues. That said, it may be that they require parity rather than around €1.20 to get a decent proportion of their money back. The only problem is whether Brexit actually has a worse impact on Continental Europe than it has here. As far as the daily chart picture is concerned, it can be seen how there is a line of support from as long ago as May last year. This runs at €1.20 and appears very robust. However, a weekly close below this level could trigger a follow on move as low as €1.12 over the next 1-2 months, which would be the floor of a wide descending price channel from last year.