GBP/USD Price Forecast – GBP/USD Trades Range Bound Above 2018 Lows
With the Brexit deal’s parliamentary vote officially delayed, PM May now has to survive an onslaught of no-confidence letters putting significant level of bearish pressure on British Pound.
Having hit a new 2018 lows at 1.2480 during yesterday’s trading hours on Brexit headlines the pair is down for a sixth consecutive week but there are no signs of downward exhaustion, neither of an upcoming change in the current downward trade. Following recent declines British Pound has become the weakest currency of G-20 bloc as of today. While UK found some support on downside owing to positive macro data released yesterday, News that German Merkel rejected UK’s May attempt to renegotiate the Brexit deal and renewed speculation that MP’s have sent 48 letters for a no-confidence vote on PM May keep Sterling under considerable bearish pressure.
Investors Focus on Updates Related To UK- EU Meet Scheduled Tomorrow
As minimum requirement for no-confidence vote has now been met according to headlines, traders await news of official proceedings to began soon however such a situation may not come to pass as this is not first time headlines hinted at no-confidence vote proceedings on PM May and Parliamentary vote on Brexit deal was cancelled which brings the UK representatives back to negotiation table tomorrow during meet with EU representatives who have so far maintained their stance stating no new deal will be made with UK. As of writing this article, GBPUSD is currently trading at 1.2507 up by 0.14% on the day. However the pair continues to trade just slightly above overnight lows as Pound bulls lack trigger to move up while US dollar saw fundamental support in form of positive macro data yesterday.
Immediate downside move has been limited owing to renewed optimism surrounding Sino-U.S. trade related talks which boosted risk appetite and put an end to US Greenback’s overnight gains. On release front, UK’s calendar has no releases for the day while US calendar will see release of Core CPI data and Crude Oil Inventories data. When looking from technical perspective, the pair is trading below Monday’s closing level and posted a lower low and a lower high daily basis, signaling bears hold the grip tight. In the shorter term, and according to the 4 hours chart, the risk is also skewed to the downside, as the 20 SMA accelerates south well above the current level, while technical indicators quickly resumed their declines after correcting oversold conditions, now maintaining strong downward slopes. Expected support and resistance for the pair are at 1.2490, 1.2465, 1.2430 and 1.2550, 1.2590, 1.2640 respectively.
Forex Today: Asia cheers Trump’s comments on trade, all eyes on US CPI
Forex today cheered the risk-on market environment fuelled by the Trump’s comments on trade and Fed policy that boosted the odds of a trade deal between the US and China.
Among the Asia-pac currencies, the Aussie jumped to 0.7230 on improved trade sentiment but lacked further upside momentum and consolidated ahead of the 0.72 handle amid ongoing broad-based US dollar strength. The Kiwi also traded firmer just below the 0.6900 level, as higher oil prices and the rally in the Asian equities boosted the higher-yielding currency. The USD/JPY pair hit a fresh 6-day highs at 113.52 and consolidated the gains near the last almost throughout the Asian trading.
The gains in the Asian stock markets were led by the Japanese benchmark, the Nikkei 225 index, which rose over 2% to trade near 21,600 levels. Meanwhile, gold prices on Comex traded modestly flat around the 1250 barrier heading into the critical US inflation report.
Key Focus Ahead
A thin showing on the macro data front extends into the European session, with nothing of note until the release of the Eurozone industrial production data at 1000 GMT. Also, the major central banks” speakers have switched to the sidelines ahead of the ECB policy decision tomorrow and next week’s Fed verdict.
In the NA session, the key US CPI report for November will be released at 1330 GMT that is likely to arrive at 2.2% vs. 2.5% previous while the core figures are seen a tad firmer at 2.2% vs. 2.1% last. At the same time, the Canadian third-tier capacity utilization data will be reported.
The main event risk for today is likely to be the meeting between the EU”s Juncker and the Italian PM Conte due at 1500 GMT, as both the leaders are likely to discuss the Italian budget. Further, the official US government crude stockpiles data will be published at 1530 GMT, followed by the US monthly budget statement at 1900 GMT.
EUR/USD may defend key support on the rising odds of US-China trade deal
The EUR/USD pair may defend the support of the trendline connecting the Nov. 13 and Nov. 28 lows for the second day on the back of risk-on action in the equities.
GBP/USD set for a break lower from 1.2500 as Brexit evolution continues
Wednesday will be clean of UK economic data, and Thursday will be likewise empty, with only RICS Housing Prices on the docket early Thursday at 00:01 GMT, well before the London markets open.
US CPI Preview: Inflation to decline, core rate stable
Annual core inflation which excludes food and energy prices is predicted to increase to 2.2% in November from 2.1%. On the month no change is expected from the October gain of 0.2%.
SNB to maintain a dovish tone on Thursday – HSBC
In the view of the analysts at HSBC bank offer a sneak peek at what to expect from the Swiss National Bank (SNB) monetary policy decision due later this week.
Stock Market News
Stocks cheered by Trump trade talk; sterling plagued by politics
Asian stock markets rallied on Wednesday as U.S. President Donald trump sounded upbeat about a trade deal with China, while sterling struggled with the risk of an imminent party coup against British Prime Minister Theresa May.
In an interview with Reuters, Trump said talks were taking place with Beijing by phone and he would not raise tariffs on Chinese imports until he was sure about a deal.
Trump also said he would intervene in the Justice Department’s case against a top executive at China’s Huawei Technologies if it would serve national security interests or help close a trade deal.
A Canadian court on Tuesday granted bail to the executive in a move that could help placate Chinese officials angered by her arrest.
The news was enough to prompt a bounce after days of losses, and MSCI’s broadest index of Asia-Pacific shares outside Japan advanced 1.2 percent.
Japan’s Nikkei led the way with a jump of 2 percent, while Shanghai blue chips trailed with just 0.2 percent.
E-Mini futures for the S&P 500 added 0.5 percent and spreadbetters pointed to gains for European bourses.
Having been repeatedly disappointed before, analysts were careful to not get too optimistic about prospects of a trade agreement.
“From the Huawei case, it is increasingly obvious that the China-US trade war is about the exchange of technology, and the development of advanced technologies by Chinese companies,” said analysts at ING in a note.
“The truce will not address these issues. And therefore tension between China and U.S. will continue.”
Sentiment had got a lift on Tuesday from reports China was considering cutting import tariffs on American-made cars to 15 percent from the current 40 percent.
Yet there were also reports the U.S. would release evidence this week detailing Chinese hacking and economic espionage.
“Even if this (auto) step is taken it just removes what was a retaliatory measure to begin with,” noted ANZ economist David Plank. “Whatever the case, market price action is somewhat of a chop-fest, right now, as it swings around on each new headline.”
Markets had also been jolted when Trump threatened to shut down the government over funding for a wall he has promised to build on the southern border with Mexico.
China stocks higher at close of trade; Shanghai Composite up 0.31%
China stocks were higher after the close on Wednesday, as gains in the Oil Equipment Services & Distribution, Real Estate Investments & Services and Electricity sectors led shares higher.
At the close in Shanghai, the Shanghai Composite rose 0.31%, while the SZSE Component index added 0.16%.
The best performers of the session on the Shanghai Composite were Jiangsu Sunrain Solar Energy Co Ltd (SS:603366), which rose 10.09% or 0.440 points to trade at 4.800 at the close. Meanwhile, Aurora Optoelectronics Co Ltd (SS:600666) added 9.88% or 0.330 points to end at 3.670 and Ningbo Jifeng Auto Parts Co Ltd (SS:603997) was up 7.32% or 0.57 points to 8.36 in late trade.
The worst performers of the session were Zhejiang Langdi Group Co Ltd (SS:603726), which fell 9.17% or 2.080 points to trade at 20.600 at the close. Eastern Communications Co Ltd A (SS:600776) declined 7.01% or 0.540 points to end at 7.160 and Nanjing Panda Electronics Co Ltd (SS:600775) was down 6.02% or 0.40 points to 6.24.
The top performers on the SZSE Component were Zhejiang Longsheng Auto Parts Co Ltd (SZ:002625) which rose 10.05% to 9.64, Jiangxi Special Electric Motor Co Ltd (SZ:002176) which was up 9.98% to settle at 6.83 and EVE Energy (SZ:300014) which gained 6.41% to close at 16.60.
The worst performers were Guangdong Eastone Century Technology Co Ltd (SZ:300310) which was down 4.85% to 5.10 in late trade, Fujian Guanfu Modern Household Wares Co Ltd (SZ:002102) which lost 4.55% to settle at 1.89 and Holitech Technology Co Ltd (SZ:002217) which was down 3.95% to 5.350 at the close.
Rising stocks outnumbered declining ones on the Shanghai Stock Exchange by 715 to 618 and 144 ended unchanged.
Bitcoin Cash – ABC, Litecoin and Ripple Daily Analysis – 12/12/18
Bitcoin Cash – ABC Deep in the Red
Bitcoin Cash ABC slid by 4.99% on Tuesday, following on from a 4.28% fall on Monday, to end the day at $96.44.
Bearish through most of the day, Bitcoin Cash ABC slid from a start of a day intraday high $101.51 through to an early afternoon intraday low and new swing lo $92.42. The reversal saw Bitcoin Cash ABC slide through the first major support level at $97.93 and second major support level at $94.08 before steadying and break back through the second major support level.
At the time of writing, Bitcoin Cash ABC was down 1.04% to $95.43, with Bitcoin Cash ABC recovering from an early morning low $94.23 to a morning high $95.81 before easing back, the day’s major support and resistance levels left untested early on.
For the day ahead, a move back through the morning high $95.81 to $96 levels would be needed to signal an afternoon rally, with Bitcoin Cash ABC needing to move through $96.80 to bring $101 levels and the day’s first major resistance level at $101.16 into play before any pullback.
Failure to move through to $96 levels could see Bitcoin Cash ABC fall back deeper into the red, with a pullback through the morning low $94.23 to $93 levels bringing the day’s first major support level at $92.07 and sub-$92 levels into play before any recovery, while we would expect Bitcoin Cash ABC to steer clear of sub-$90 levels on the day.
Litecoin Touches Falls Again
Litecoin fell by 3.13% on Tuesday, following on from a 5.22% slide on Monday, to end the day at $23.22.
A relatively range bound early part of the day saw Litecoin move from an opening $23.97 to an intraday high $24.38, coming up well short of the first major resistance level at $25.23, before being hit by a broad based crypto sell-off in the late morning.
The reversal saw Litecoin fall through the first major support level at $23.13 to an early afternoon intraday low $22.72 before recovering to $23 levels.
At the time of writing, Litecoin was up 0.82% to $23.41, with moves through the early morning seeing Litecoin rise from an early morning low $23.01 to a morning high $23.53 before easing back, a relatively range bound start to the day leaving the major support and resistance levels untested.
For the day ahead, a hold onto $23.4 levels through the morning would support a move through the morning high to bring the first major resistance level at $24.16 into play, with any broad based cryptomarket rally supporting a run at $25 levels and the second major resistance level at $25.10 before any pullback.
Failure to hold onto $23.4 levels through the morning could see Litecoin hit reverse and resume the week’s slide. A pullback through the morning low $23.01 to $22 levels would bring the day’s first major support level at $22.5 into play, with the second major support level at $21.78 in play should sentiment fail to shift through the middle of the afternoon.
Ripple Touches sub-$0.30s
Ripple’s XRP fell by 1.14% on Tuesday, following on from a 3.07% slide on Monday, to end the day at $0.3040.
A bullish start to the day saw Ripple’s XRP rise to an early morning intraday high $0.31901, coming up against the first major resistance level at $0.3193 to hit reverse through the rest of the morning and early afternoon.
The pullback saw Ripple’s XRP slide to a late afternoon intraday low $0.299, calling on support at the first major support level at $0.2979 to recover back through to $0.30 levels.
At the time of writing, Ripple’s XRP was up 0.41% to $0.30516, with Ripple’s XRP recovering from a start of a day morning low $0.30195 to strike a morning high $0.30749 before easing back, the day’s major support and resistance levels left untested.
For the day ahead, a move back through the morning high would bring $0.31 levels and the day’s first major resistance level at $0.3156 into play, while we would expect Ripple’s XRP to fall short of $0.32 levels, with Tuesday’s high $0.31901 likely to limit the upside on the day.
Failure to move back through the morning high $0.30749 by the early afternoon could see Ripple’s XRP hit reverse later in the day, a fall through the morning low $0.30195 bringing sub-$0.30 levels and the day’s first major support level at $0.2956 into play.
Sentiment across the broader market later in the day will dictate whether the day’s second major support level at $0.2873 will be in play, the negative bias needing investors to heavily guard the downside.
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