Price of insuring against swings in pound/dollar has soared in last few days as Guardian/ICM poll showed public leaning towards Brexit. According to the survey, which was conducted online and by telephone, 52% supports exit and 48% wants to stay. It is stark reversal from recent polls, which has been showing in camp with significant lead.

In past three days, implied volatility (IV), in one month options soared from 10 percent to little more than 20%. It is at highest level since the financial crisis. Pound is down 270 pips since the poll.

We expect, Pound to drop further at least another 200 pips against Dollar and try to test out 1.42 support area.

If Pound fails to clear resistance around 1.48 against Dollar, there is a strong possibility that it could fall to as low as 1.36, heading into referendum.

However, it may gain against Euro.