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With the unexpected emergence of an increasingly anti-EU theme in recent referendum polls, sterling has suffered substantial losses. However, with just nine days until the vote, it is worth looking into the current state of play for the pound and what markets might be the best bet in each scenario.
The first thing to note is that price action has been largely dictated by the change in sentiment from poll data. The IG binary is not an average of poll results, but it is certainly influenced by each one that comes out.
As such, the clear correlation between the IG binary and GBP/USD is really an indication that largely GBP/USD has been trading based upon shifting expectations for the referendum.
This makes technical analysis difficult and means the focus should largely be upon either a long-term view or a short-term view. In this, we will take the long-term view.