Last week was full of surprises! The US dollar plunged despite a better-than-expected retail sales report…
Fears over no-deal Brexit pushed GBP down
All attention on the market is on the Brexit process. Fears over the no-deal Brexit pushed the British pound deep down yesterday after UK Prime Minister Boris Johnson claimed he was ready to abandon negotiations. However, there is still a chance that the deal may be reached as Boris Johnson will have a meeting in Brussels today with European Commission President Ursula von der Leyen. After this news, GBP/USD surged. That’s why it’s really important to follow Brexit news today for every trader. Some positive developments towards the Brexit agreement will drive the pound up, whereas negative ones will push it down. Let’s look at the chart.
GBP/USD has managed to regain some yesterday’s losses. However, it failed to cross the key resistance of 1.3400 on its way up. If it manages to break it, it will rise to yesterday’s high of 1.3435. On the flip side, the move below the support of 1.3300 will open doors towards yesterday’s low of 1.3265.
Moving on to the US news, Trump’s administration imposed sanctions on Chinese officials over the Hong Kong issue. Since the virus cases are steadily rising and Friday’s NFP is downbeat, investors are increasingly looking for the US stimulus package. Hopes for a relief package and the overall cautious sentiment on the market drove gold higher. It has jumped slightly above the 50% Fibonacci retracement level but still has struggled to break the 200-period moving average of $1 870. The move above it will drive gold to the 61.8% FIbo level of $1 890. Support levels are $1 840 and $1 825.
EUR/USD is edging higher. If it jumps above the 50-hour moving average of 1.2135, the way up to yesterday’s high of 1.2155 will be clear. In the opposite scenario, If it drops below the support of 1.2100, it may drop to yesterday’s low of 1.2095.
Japan’s Prime Minister unveiled the stimulus package of 708 billion. Besides, Japan published the better-than-expected GDP today. USD/JPY is trading sideways at 104.00. The US dollar is really weak these days, that’s why we can assume that investors will favor the JPY amid the current cautious sentiment. The move below yesterday’s low of 103.90 will drive the pair to the next support of 103.70. Resistance levels are 104.20 and 104.40.
Last week was very interesting for the markets, as we saw the releases of the US Inflation and Disney’s earnings report. So let's see what we should await this week!
The volatility that the markets experienced last week promises the second tidal wave! What should your favorite assets anticipate during the first week of February?
The US Markit will publish Flash Manufacturing and Flash Services PMIs (purchasing managers' indices) on June 23 at 16:45 GMT+3.
The Fed Chair Jerome Powell will testify on the Semi-Annual Monetary Policy Report before the House Financial Services Committee on June 22-23 at 17:00 GMT+3.
Canada will publish Retail Sales and Core Retail Sales on June 21 at 15:30 GMT+3.