1-888-998-3948


Tuesday, March 12, 2019

Sterling goes on a Brexit roller-coaster ride

Sterling goes on a Brexit roller-coaster ride
Source: Powered by Exchange Bank of Canada - www.ebcfx.com/news

Summary

  • USDCAD: Dollar/CAD is trading bid this morning, but this comes after the market lost trend-line support at the 1.3410 level in late NY trade yesterday.  The broader USD couldn’t make much headway during Asian trade overnight but some buying entered in Europe following some disappointing headlines on Brexit.  The US CPI figures for February were just reported and they missed expectations on the YoY headline and core readings.  April crude oil is trading higher this morning after it was reported that Russian oil companies will adhere to agreed OPEC cuts until July 2019.  We think USDCAD trades with a choppy, but slightly more offered tone today.  Chart support comes in at the 1.3375-80 level, while resistance is 1.3410, 1.3425, then 1.3450.

  • EURUSD: The euro/dollar market has been putting the entrenched fund short position to the test this morning by tripping buy stop orders above the 1.1270s.  There really wasn’t much driving the early European move through this level, but the gains have quickly evaporated and we’re now looking at a market that appears content to follow GBPUSD lower amid more Brexit misery.  The BTP/Bund spread continues to knock on the door of +250bp to the upside.  USDCNH is holding the 6.71 level and the S&P futures are dialing back some of yesterday’s gains this morning.  The slightly weaker than expected US CPI figures for February are now inviting some buying back into the 1.1270s.  We think the shorts may have to be on guard again here.

  • GBPUSD: It’s been a crazy 24hrs for sterling as the Brexit headlines go on overdrive.  It all started with reports shortly after the NY open yesterday morning about Theresa May making a last minute trip to meet Jean Claude Juncker in Strasbourg.  Rumors then started to swirl that she had hammered out some sort of deal that would finally resolve the heated Irish backstop issue.  GBPUSD traders didn’t wait around for details and instead scrambled to buy the market.  Three chart resistance levels (1.3070s, 1.3140-50, and 1.3210-30) ultimately all gave way over the NY session and into Asian trade, and the market finally took at break when we hit horizontal resistance in the 1.3280s.  Theresa May confirmed the rumors this morning, by announcing new legally binding changes to the Irish backstop (which on the surface is very positive news), however the UK Attorney General, Geoffrey Cox, has just thrown cold water over all this by saying that the legal risk for the UK remains unchanged.  In his words, “the UK would have no internationally lawful means of exiting the protocol’s arrangements” should the UK and the EU not be able to figure out a solution for the Irish border before the end of the Brexit transition period.  These headlines, released around the 7am hour, have now sent GBPUSD careening lower into the 1.3010 support level.  Some buyers are trying to emerge again and are trying to regain the 1.3050-70s at this hour, but all this volatility has turned the chart technicals into a bit of a mess here.  It turns out that a “meaningful vote” will still occur today in UK Parliament at today at 3pmET, where Theresa May is now almost certainly expected to lose.

  • AUDUSD: The Aussie is trading with a neutral tone this morning as traders digest the overnight whipsaw in EURUSD prices.  May copper is trading higher to the tune of 1%.  The slightly softer US inflation figures for February (just reported) are inviting some buyers back in now.  We think AUDUSD can continue higher here.

  • USDJPY: Dollar/yen made some headway to the upside late yesterday after holding the 111.00 mark, and those gains extended into overnight trade, but the market appears to be struggling with broad USD selling since the NY open.  The softer CPI figures out of the US, and over 1.2blnUSD in options expiring at the 111.00 strike this morning, don’t appear to be helping here.  We think traders may need to quickly prepare for the downside, should the 111.10s give way.

Tune in @EBCTradeDesk for more real-time market coverage.

 

Market Analysis Charts

USD/CAD Daily Chart

USD/CAD Hourly Chart

April Crude Oil Daily Chart

EUR/USD Daily Chart

EUR/USD Hourly Chart

USD/CNH Daily Chart

GBP/USD Daily Chart

GBP/USD Hourly Chart

EUR/GBP Daily Chart

AUD/USD Daily Chart

AUD/USD Hourly Chart

May Copper Daily Chart

USD/JPY Daily Chart

USD/JPY Hourly Chart

March S&P 500 Daily

Charts: TWS Workspace


About the Author

Erik Bregar

Erik Bregar - Director, FX Trading

linkedin twitter

Erik works with corporations and institutions to help them better navigate the currency markets. His desk provides fast, transparent, and low cost trade execution; up to the minute fundamental and technical market analysis; custom strategy development; and post-trade services -- all in an effort to add value to your firm’s bottom line. Erik has been trading currencies professionally and independently for more than 12 years. Prior to leading the trading desk at EBC, Erik was in charge of managing the foreign exchange risk for one of Canada’s largest independent broker-dealers.

Interested in creating a custom foreign exchange trading plan? Contact Us or call CXI's trading desk directly at 1-833-572-8933.

About Currency Exchange International
Currency Exchange International (CXI) is a leading provider of foreign currency exchange services in North America for financial institutions, corporations and travelers. Products and services for international travelers include access to buy and sell more than 90 foreign currencies, multi-currency cash passports, traveler's cheques and gold bullion coins and bars. For financial institutions and corporations, our services include the exchange of foreign currencies, international wire transfers, global EFT, the purchase and sale of foreign bank drafts, international traveler's cheques, and foreign cheque clearing through the use of CXI's innovative CEIFX web-based FX software www.ceifx.com

Disclaimer: All product names, logos, and brands are property of their respective owners. All company, product and service names used in this website are for identification purposes only. Use of these names, logos, and brands does not imply endorsement.

This publication has been prepared by Currency Exchange International for informational and marketing purposes only. Opinions, estimates and projections contained herein are our own as of the date hereof and are subject to change without notice. The information and opinions contained herein have been compiled or arrived at from sources believed reliable, but no representation or warranty, express or implied, is made as to their accuracy or completeness and neither the information nor the forecast shall be taken as a representation for which Currency Exchange International, its affiliates or any of their employees incur any responsibility. Neither Currency Exchange International nor its affiliates accept any liability whatsoever for any loss arising from any use of this information. This publication is not, and is not constructed as, an offer to sell or solicitation of any offer to buy any of the currencies referred to herein, nor shall this publication be construed as an opinion as to whether you should enter into any swap or trading strategy involving a swap or any other transaction. The general transaction, financial, educational and market information contained herein is not intended to be, and does not constitute, a recommendation of a swap or trading strategy involving a swap within the meaning of U.S. Commodity Futures Trading Commission Regulation 23.434 and Appendix A thereto. This material is not intended to be individually tailored to your needs or characteristics and should not be viewed as a "call to action" or suggestion that you enter into a swap or trading strategy involving a swap or any other transaction. You should note that the manner in which you implement any of the strategies set out in this publication may expose you to significant risk and you should carefully consider your ability to bear such risks through consultation with your own independent financial, legal, accounting, tax and other professional advisors. All Currency Exchange International products and services are subject to the terms of applicable agreements and local regulations. This publication and all information, opinions and conclusions contained in it are protected by copyright. This information may not be reproduced in whole or in part, or referred to in any manner whatsoever nor may the information, opinions and conclusions contained in it be referred to without the prior express written consent of Currency Exchange International.
Posted By Jennifer Danuff at 08:15 AM
comments powered by Disqus

Platinum Passport

Travelers: Never miss a thing and be the first to know about CXI branch promotions, travel tips and hot trends.

Currency Insider

Corporations & Financial Institutions: Want to get ahead of the curve for the upcoming week? Get CXI's currency market trend analysis sent directly to your inbox weekly.