British Pound, GPP / USD, Extended Brexit Negotiations, IGCS – Speaking Points:
- Stock markets gained widely during the EPAC trade as investors encouraged stimulus improvement and the use of Pfizer’s Covid-19 vaccine in the United States.
- Extended Brexit talks could help the British pound in the short term.
- However, the lack of meaningful progress on a number of key issues suggests that a non-contractual situation is still a viable option.
- The GPP / US dollar rates are ready to extend losses as prices carve a double top reverse shape.
Asia-Pacific Reuse
Stock markets soared during Asia-Pacific trading as market participants made progress in stimulus talks and this week encouraged the use of Pfizer’s corona virus vaccine in the United States.
Japan’s ASX 200 index was up 0.27% and Japan’s Nikkei 225 index was up 0.3% as Japanese business confidence rose to its highest level since the first quarter of 2020.
China’s CSI 300 index rose 0.97%, with news that Beijing will soon increase its financial support efforts.
In the FX markets, the extension of the Brexit talks lifted the British pound against its key allies, while the US dollar and JPY, which are associated with asylum, continued to lose ground.
Gold and silver have declined despite yields in the U.S. 10-year treasury, which are relatively stable at 91 basis points.
Looking ahead, the euro-zone industrial production figures for October are the title of the economic shipwreck with consumer inflation expectations from the United States.
The market reaction chart was created using TradingView
Extended Brexit talks supporting GPP
The politically sensitive British pound kicked off a new weekend trade after British Prime Minister Boris Johnson and EU Commission President Ursula van der Leyn agreed to continue the Brexit talks. Hopes of scoring a last-minute deal.
The couple issued a joint statement on Sunday evening, saying, “After nearly a year of negotiations, despite the fatigue and missed the deadline again, we feel responsible.” Point to go the extra mile ”.
These comments do not indicate any material progress in the negotiations, and Johnson says that “we are still a long way off on some important issues” and that a deal before December 31 is relatively unlikely to be approved. Deadline.
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After all, negotiations are plagued by the same two main issues – Fisheries and Level Playground – They have affected negotiations in recent months.
Moreover, French European Affairs Minister Clement Beyonc has warned, “If there is an agreement, if it is not good, we will oppose it with veto rights.”
French President Emmanuel Macron is also said to have told the EU to hold talks beyond the end of the year deadline.
With this in mind, if the British pound includes a free trade agreement in the coming weeks, there is a risk of significant losses in the near term.
GBP / USD Daily Chart – Double Top in Sport?
GPP / USD Daily Chart created using TradingView
From a technical point of view, GPP / USD ratios may be at risk of an extended bush low, as prices are ashamed to see the major psychological resistance to double-top formation at 1.3500.
If the RSI drops below 50 and a rough cross-section takes place in the MACD indicator, the path of minimum resistance will be negative.
Slipping below the 21-day moving average and the 1.3300 mark could push prices towards consolidated support in the March high (1.3200) and fall from May.
Removing it would trigger a more comprehensive correction and focus on the August low (1.2981) and the 200-DMA (1.2925) defining sentiment.
GBP / USD 4-Hour Chart – Anti-Psycho Capping Reverse
GPP / USD 4 hour chart created using TradingView
However, zooming in on the four-hour chart suggests that the GPP / USD may outperform its latest impetus, as prices are more than 200-mA (1.3252) and resistance to the former support back to the Pitchfork parallel.
That being said, a comprehensive reversal is relatively unlikely as the RSI continues to value the prolonged fall from the November peak and the MACD indicator monitoring below its neutral midpoint.
Nonetheless, a breach of the December 10 high (1.3376) could neutralize nearby selling pressure and psychologically pave the way for the price to explore the 1.34 mark. Prohibition centering on the resistance range of 1.3470 – 1.3480.
Alternatively, failing to hold above the trend-defining 50-mA (1.3337) will allow sellers to regain control and push the price back to 1.3300. Breaking down will probably close the price gap and challenge support for the March high (1.3200).
The IG Client Sentiment Report The proportion of traders with a net length of 40.83% is 1.45 to 1. The number of net long-term traders is 0.18% lower than yesterday and 2.13% lower than last week, while the number of net-short traders is 2.90% higher than yesterday and 4.71% lower than last week.
We generally take the opposite view of crowd sentiment, and the fact that traders are net-narrow suggests that GPP / US dollar prices may continue to rise.
Stabilization is net-shorter than yesterday, but net-shorter than last week. The combination of current sentiment and recent changes gives us a more mixed GPP / US dollar trade orientation.
— Written by Daniel Moss
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