Two of the mostly keenly awaited macroeconomic events so far this year occur in the next fortnight, and both have implications for Cable.

They are, of course, the Fed’s decision on interest rates (June 15) and the UK’s referendum on continued EU Membership (June 23).

Additionally this week we have an array of UK and US releases including UK RPI and CPI, US PPI and Retail Sales, and employment statistics for both economies.

The release schedule is shown at the foot of this article(please drag image into a new window if it is hard to read).

The Fed’s interest rate announcement on June 15 is unlikely to include a rate change but may provide clues as to the Fed’s view on when a hike would be appropriate.  Last week Fed Chair Yellen stated that the decision would be data dependent but that a rise was still being considered, which helped alleviate drag on the dollar following a terrible NonFarm Payrolls report on June 3rd.

Any comments from the Fed confirming that a rate hike is on the table for the next few months will help strengthen dollar further.  PPI and Retail Sales will play in to this to some extent, as one of the Fed’s areas it is monitoring is confirmation that inflation is not dying off.

The Bank of England is highly unlikely to adjust its interest rates on Thursday (June 16th)’s meeting and is more likely to warn of the dangers of Brexit again – this had an adverse effect on GBP last month when Governor Carney warned of dire consequences and hinted that policy intervention may be resorted to if the economy suffers in the event of a Brexit.

These warnings and the thought process behind them has lead to GBP sliding each time Polls confirm a lead for the “Leave” campaign.  Three such polls were released on Friday 10th and Saturday 11th, with GBP trading bearishly across the board in the Asian session.

The “Leave” campaign seems to be firming up a narrow lead against the “Remain”ers and it seems likely that further polls (which are generally not released to a schedule) could provide further shocks to GBP.

Overall Cable will be extremely volatile in the run up to the Referendum and even moreso immediately afterwards whatever the outcome:  I urge caution when dealing with GBP pairs during this period.

Generally GBPUSD risk is to the downside, unless

1) polls start to show Remain retaking the lead in the UK or
2) the Fed signals that it is not satisfied with US economic data and/or global risk levels and explicitly pushes a rate hike back later into the year.

COT data shows a sharp increase in short GBP positions suggesting a mass of bears and not just profit taking after cable’s cautious bull channel.

As mentioned risk is to the downside and bad Brexit polling data last Friday (June 10) saw cable’s break out of the weekly channel push further south.

We are approaching the red descending trend line that dominated much of H2 2014 and 2015.  Perhaps it will take control again as it intersects the rising channel that had defined a small GBP rally so far this year.

All time frames are oversold except weekly which could mean a bearish outlook for some more time: although of course a the Referendum outcome will prove decisive itself one way or another.

Price has jumped in below the weekly central pivot but with a significant bearish bias the downside target of WS2 at 1.388 seems achievable, coinciding with static support at 1.38.  Monthly S2 is at approximately 1.4.