The theme of today’s European session trade was undoubtedly risk aversion, with every major European equity bourse losing ground, bond yields generally rising, and oil losing another 2+%  thus far.

As often happens in markets though, the big catalyst for today’s trade is not what most traders were expecting.

Heading into today, most market participants were keyed in on today’s U.S. economic data and preparing for the Federal Reserve’s announcement tomorrow. As it turns out though, today’s U.S. reports were a bit of a dud: both the PPI (-0.2% m/m) and Retail Sales (-0/1% m/m) came out exactly as expected.

What wasn’t expected however, was the release of an opinion poll in The Telegraph, a conservative UK newspaper. The exclusive poll showed a 49% plurality of all voters favored the “Leave” position, compared to 47% in favor of remaining in the EU. When restricted to voters who were “definitely planning on going to the polls,” the Leave campaign was ahead by a 52%/45% margin. In other words,The Telegraph’s poll suggests that there is a clear enthusiasm gap in favor of leaving the EU.

Technical View: GBP/USD

While more sober analysis suggests taking a single poll from a pro-“Leave” paper with a large grain of salt, jittery traders opted to sell first and ask questions later. As the chart below shows, GBP/USD is trading off nearly 300 pips from the high late last week and has broken below its 3-week bullish channel. After today’s stark reminder of the looming uncertainty in the UK, rates are testing the nearly 2-week low in the lower 1.41s. As for the secondary indicators, the 4hr MACD is trending lower below both its signal line and the “0” level, showing bearish momentum, while the 4hr RSI is not (quite) in oversold territory yet.

Source: FOREX.com

Moving forward, this week’s upcoming economic data (below) should drive the near-term swings in the pair. If the data shows that the growth gap between the United States and UK is widening, GBP/USD could break 61.8% Fibonacci support in the 1.4060 area on its way back down to the upper-1.30s. On the other hand, some reassuring UK data (and/or disappointing reports from the US) could lead to a bounce in GBP/USD back toward above 1.4200 or toward 1.4300 next. Over a medium-term horizon, it will be difficult for GBP/USD to stage a rally back above the 1.50 level as long as the prospect of a Brexit remains credible.

Key economic data/news that could impact GBP/USD this week (all times GMT):

• Wednesday: UK Employment Report (9:30 GMT), UK Budget release (12:30), U.S. CPI and Building Permits (12:30), Federal Reserve Statement, SEP (18:00) and Press Conference (18:30)
• Thursday: BOE Monetary Policy Decision (12:00), U.S. Philly Fed and Initial Jobless Claims (12:30 GMT)
• Friday: U.S. UofM Consumer Sentiment (14:00)