GBP/USD Price Forecast – Sterling Continues To Face Bearish Pressure from Brexit Woes
The GBP/USD pair spent most of this first day of the week holding above 1.2800 ending the day marginally lower in the 1.2800 price zone. The Pound bulls took no heed to words of UK’s Chancellor Phillip Hammond during presentation of kingdom’s budget. The budget forecast report was slightly hawkish as Growth forecast was revised slightly higher and the expected deficit was lower and he even mentioned that “the era of austerity is over”, however traders remained concerned about his comments made over the weekend when he mentioned that a no-deal Brexit will need adjustment to this budget which seemed to many investors across the globe that UK is heading for a No-Deal Brexit Scenario. As of writing this article, the GBPUSD pair is trading at 1.2799 up 0.05% on the day and has maintained a range bound price action for majority of Asian market hours.
Lack of Macro Data & Brexit Updates Resulted in Pair Momentum being Influenced By Broad Based USD Sentiment
Tuesday is a data-light day for the Sterling, leaving investors to fret over the lack of momentum on Brexit proceedings, though knock-on volatility could be expected towards the London market session’s midday when Europe sees GDP figures at 10:00 GMT, and a missed reading for the EU’s still-struggling growth figures could see risk appetite take a further swing lower as US Dollar buying remains a popular activity in the broader forex space. Pound bulls are expected to remain on the ropes as headlines surrounding the UK’s departure from the European Union continue to go nowhere, while headlines surrounding Brexit continue to remain as major driving force behind British Pound’s momentum in broad market. The pair is expected to move in a range bound fashion ahead of EZ’s GDP update with slight bearish incline towards the multi-month low of 1.2776 hit last week.
AUD/JPY: trade war risk just elevated knocking the wind out of the Aussie
AUD/JPY bears have been in control with rallies faded while price trades below the 200 4hr & 1hr SMAs as the price chops its way out of the ST to the downside. The latest news that the markets have reacted to flows a period of silence in the rade war front as we lead up to the G20 and next possible summit between Trump and Xi on the 26th Nov in Buenos Aires.
Today, it was reported that the U.S. is preparing to announce by early December tariffs on all remaining Chinese imports if talks next month between the presidents fail to ease the trade war. This rattled Wall Street that had started out well in a bullish correction. All three benchmarks are a sea of red – S&P 500 – 0.66%, NASDAQ -1.63% and the DJIA -0.99%. AUD/USD had a rough ride on this while USD/JPY actually remained relatively firm as the dollar takes the news in its stride looking solid above 96.50 and the 21-hr SMA still. Looking ahead, Chinese PMI and Aussie CPI could be the nail in the coffin for the Aussie.
AUD/JPY is on the verge of breaking away from the 4hr 21 SMA with eyes on S1 78.75 with MACD turning less positive on the 4hr sticks although the daily points to a period of consolidation around the pivot. RSI is neutral. A break of S1 opens S2 at 78.16 and 77.75 as S3. To the upside, R3 is located at 80.76 guarding the 200-D SMA at 82.36.
Stock Market News
Asian stocks on edge over escalation in U.S.-China trade tensions
Asia shares recouped early losses and crept higher on Tuesday as China made a fresh attempt to stabilise its stock markets, but the gains looked fragile amid fears of a sharp escalation in the U.S.-China trade war.
Major U.S. indexes fell sharply on Monday after a Bloomberg report that the United States is preparing to announce tariffs on all remaining Chinese imports by early December if talks next month between presidents Donald Trump and Xi Jinping falter.
Trump had raised the possibility of such a move previously, but had not indicated a timeframe.
MSCI’s broadest index of Asia-Pacific shares outside Japan swung in and out of negative territory in morning trade and was up 0.2 percent by midday.
The index has lost 12 percent this month and is on track for its biggest October decline since 2008, during the global financial crisis.
Mainland China’s benchmark Shanghai Composite and the blue-chip CSI 300 were also choppy, falling in early trade before rising 0.7 percent and 1.0 percent, respectively, by midday.
China’s securities regulator said it would encourage share buybacks and mergers and acquisitions by listed firms, and would enhance market liquidity, in the latest attempt to put a floor under the country’s skidding equity markets.
HSBC Posts Nearly 30% Profit Jump in Third Quarter
The shares of Europe’s largest bank, HSBC Holdings PLC (HK:0005) gained 0.39% to HK$63.8 on Tuesday morning in Asia after a better-than-expected earnings announcement in the previous session.
HSBC reported a 28% profit hike to $5.9 billion in the third quarter, compared to $4.6 billion in the same period last year. Profit for the first nine months of the year also surged 12% year-on-year from $14.9 billion to $16.6 billion.
The company’s revenue for the first nine months of this year reached $41.1 billion, 5% up from $39.1 billion in the same period in 2017. The London-based company owns assets of $2,603 billion as of Sept. 30.
Despite the numbers, analysts issued warnings about the firm’s business prospects.
“We think there are risks going forward for HSBC. We’ve seen a flurry of downgrades, we’ve seen the share price coming down,” Kevin Leung, executive director of investment strategy at Haitong International Securities, told CNBC.
Bitcoin Prices Drop as Russia Seeks Intervention of FATF to Regulate Crypto
Bitcoin prices dropped on Tuesday following reports that Russia contacted the Financial Action Task Force (FATF), a global financial regulatory body, to regulate cryptocurrencies.
Bitcoin dropped 2.1% to $6,395.8 by 1:53 AM ET (05:53 GMT) on the Bitifinex exchange.
Ethereum fell 3.6% to $198.02 and Litecoin dropped 5.5% at $49.611. XRP dipped 2.9% to $0.44956 on the Poloniex exchange.
Citing local media sources, CNN reported on Tuesday that Russia urged the FATF to request an intergovernmental initiative that could control the supply and flow of cryptocurrencies.
“All FATF members must change the legislation to include new crypto ecosystems. They should introduce registration and license parameters for the companies developing in the space, which include exchanges, initial coin offering projects, and cryptographic administrators. FATF should also monitor the companies’ activities and standards for anti-money laundering,” said Pavel Livadny, the Deputy Director of Russia’s Financial Monitor Service.
FATF announced in June that it wanted to create global-binding policies for cryptocurrency exchanges.
CNN added that some in the Russian crypto community have criticised FATA’s efforts were “knee-jerk reactions” to the sudden Bitcoin boom.
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