Title - Brexit, Trade Deal and Forex Outlook

Created 10/11/2019 at 09:25AM


GBP and AUD are the top G10 FX gainers today, up 0.68% and 0.47% vs the dollar while CHF and USD are the top losers. The Australian dollar rose as investors sought risky assets in hopes of a U.S.-China trade deal and orderly Brexit by the end of the month. U.S. President Donald Trump said U.S.-China negotiations were progressing "very, very good" and this provided some respite to markets.

 

The rally in British pound has stalled a little after EC President Donald Tusk said that the UK hasn't come up with a "realistic and workable" plan to resolve the Brexit deadlock. The rally in Sterling was seen after meeting between British Prime Minister Boris Johnson and Irish Prime Minister Leo Varadkar went well and it became apparent that a Brexit deal could be sealed by the end of the month. In the Asian equities space, the Nikkei 225 closed up +1.15% at 21,798.87, Hang Seng closed 2.34% at 26308.44 and Kospi ended 0.81% at 2044.61. The European equities were trading mixed with the FTSE -0.04% at 7183.75, DAX 1.66% at 12365.91, and CAC 1.05% at 5627.68.

 

In the rates market, global yields were trading firmer; the US 10-year yield was trading at 1.6716% and the Bund 10-year yield trading at -0.476%. In the energy space, the Brent (front month) is trading up (1.56%) for the day at $60.02.

 

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Daily Pivots for Key Currency Pairs

 
 

Economic Calendar

 
 

10-year Yields Chart (6-month)

 
 

Brent Front Month Daily Chart (6-month)

 
 

USD-Index Daily Chart (6-month)

 
 

Trade Weighted Basket Hourly (two-week)

 
 

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Major Currency Pairs

 

EURUSD Chart (Two-week)

 
 

Strategy: Resistance at 1.1025 for 1.0950
Short-term view: EUR/USD resistance at 1.1025, MACD and RSI are topping out. Hence, we see a move to 1.0950. Above 1.1025 to open 1.1085.

 

GBPUSD Chart (Two-week)

 
 

Strategy: Resistance at 1.2505 for 1.2381
Short-term view: GBP/USD resistance at 1.2505 MACD and RSI are topping out. We see risk of a dip to 1.2381. Above 1.2505 to open 1.2584.

 

USDJPY Chart (Two-week)

 
 

Strategy: Resistance at 108.43 for 107.20
Short-term view: USD/JPY has resistance around 108.43, MACD and RSI are topping out. Hence, we see a move lower to 107.64, likely 107.20. Above 108.43 opens 108.81.

 

AUDUSD Chart (Two-week)

 
 

Strategy: Resistance at 0.6830 for 0.6750
Short-term view: AUD/USD MACD and RSI lacks upside momentum, resistance at 0.6830 for a move lower towards 0.6750, likely 0.6700. Above 0.6830 we look for 0.6881.