Global macro overview for 04/01/2016:
The UK economy might face a number of headwinds in 2016, some of which have the potential to slow down what has so far been a robust recovery. The most important macro-political event of the year 2016 might be the UK public referendum on leaving the European Union called Brexit. In an attempt to increase the growing popularity of the right wing anti-EU UK Independence Party, Conservative leader David Cameron vowed to hold a referendum on the EU membership by the end of 2017 if he was re-elected. The Conservatives won an overall majority at the election in May this year, so it is possible that a deal may be reached by February 2016. This kind of events would enable Cameron to hold the referendum in summer, well before the deadline he set in the lead up to the election. The consequences of such a move will cause a high volatility in financial markets and this is why the outcome of the possible referendum will be monitored closely by market participants.
In the meantime, the GBP/USD pair bounced form the technical support at the level of 1.693, but did not manage yet to close above the critical resistance at the level of 1.4848.
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