Fed Chair Jerome Powell will testify today at 19:05 MT time. This event is crucial for traders as the tone of the speech may set the risk tone for the markets for the next two weeks.
The Brexit meaningful vote: last chance for Theresa May?
Brexit news continues to trigger the markets and (hopefully) create profits for traders. Today, at 16:30 MT time the British Parliament will vote on the withdrawal agreement of Theresa May once again. This is the last chance for the lawmakers to extend the Brexit process to May 22 and bring certainty to the market. According to the attorney general Geoffrey Cox, the deal must be approved by 01:00 MT if the UK wants to "secure our legal right" to an extension to Brexit.
The most controversial part is, of course, connected with the arrangements to the backstop on the Irish border. Reportedly, The Democratic Unionist Party (DUP) of Northern Ireland will vote against the deal.
So, what do we have for now? As usual, let’s consider the opportunities for the British pound today.
- If the Brexit deal is supported at the parliament, the process will be extended to May 22.
This situation will help the GBP to recover.
- If the Brexit deal is rejected, the possibility of a no-deal Brexit on April 12 increases.
In this case, the British pound will suffer.
Regardless of the outcome of today’s vote, there is still a chance for Great Britain to leave the EU with a soft Brexit. The members of the Parliament may have a second round of indicative votes on Monday and decide on the softer Brexit plan.
Key levels for the GBP/USD pair
On the daily chart, the pair is trying to stick above the 50-day SMA on the Brexit hopes. If the deal is approved today, the pair will rise higher to the weekly pivot resistance at 1.3173. If this level is broken, the next resistance is placed at 1.3342. If the deal is not approved today, bears will break the support at the weekly pivot at 1.3035. The next support lies at 1.2989. If the uncertainties are high, GBP/USD will fall further to the next support at 1.2922 (100-day SMA). If we look at indicators, Parabolic SAR shows the downward movement for the pair and ADX demonstrates that bears are gaining strength.
Non-farm payrolls, the most awaited economic report, will be out on March 5 at 15:30 MT time.
Australian GDP rose by 3.1%, exceeding analysts’ forecasts of 2.5%. The Australian dollar climbed after the release, but then joined its peers in falling against the USD.
Great news for oil bulls! OPEC and its allied producers agreed to expand output cuts for the next month.
The USD skyrocketed after Fed Powell’s speech. OPEC and allied producers agreed to extend production cuts for another month. Oil surged.
The European Central Bank publishes its monetary policy statement that includes an announcement of the interest rate on March 11, at 14:45 MT time.