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Pound Remans Above Lows Despite U.K. Declaring Brexit Talks ‘Over’ By Investing.com

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© Reuters.

By Yasin Ebrahim

Investing.com – The pound remained off session lows against the dollar Friday, shrugging over a further souring of trade talks between the U.K. and EU after Prime Minister Boris Johnson’s spokesman said talks were “over” unless there was a fundamental change from the economic bloc.

rose 0.06% to $1.2920, above its session low of $1.2866.

“There is only any point in Michel Barnier coming to London next week if he’s prepared to address all the issues on the basis of a legal text in an accelerated way, without the UK required to make all the moves or to discuss the practicalities of travel and haulage,” the official spokesman for the prime minister said, according to media reports.

Just a day earlier, EU leaders dropped their commitment to work “intensively” with the U.K. to reach a trade deal and said Britain would need to “make the necessary moves” to secure an agreement.

Level playing field commitments, fisheries, and issues of governance continue to be key sticking points holding up progress on trade talks.

Negotiators on both sides have confirmed, however, they will be in touch via telephone next week.

The lack of progress on a deal and the surge in Covid-19 infections have some on Wall Street earmarking bets against the GBP/USD against a favorable trade next week.

“We are recommending a short tactical GBP/USD trade idea to reflect higher Brexit risks in the week ahead after the EU leaders summit failed to make progress on a trade deal,” MUFG notes. “The outlook for the UK economy is darkening heading into year end which could encourage the BoE to deliver more stimulus next month,” it added.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.





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Gold Prices Wilt as Virus Spike Spurs Haven Demand. Biden Leading in Polls

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2020 Election, Gold Prices, Coronavirus Cases, Election Day – Talking Points

  • Gold prices may decline if rising Covid-19 cases stoke demand for haven-linked USD
  • Democratic nominee Joe Biden continues to lead in the polls with his 7-point average
  • XAU/USD price action turning more bearish; is the uptrend in danger of invalidation?

8 DAYS UNTIL THE US PRESIDENTIAL ELECTION

It is almost exactly one week until election day and the polls continue to indicate that Democratic nominee Joe Biden will take the White House. According to RealClearPolitics, the former Vice President is almost 8 points ahead of incumbent President Donald Trump. This figures falls in line with the rough 7-point average Mr. Biden has held for several months apart from a few brief interims of polling convergence.

2020 US Election Polls

Chart showing polling data

Source: RealClearPolitics

Virus Spike Souring Sentiment

Coronavirus cases around the US and world are dramatically spiking and bringing to light the much-dreaded premonition of a second wave hitting the globe in Autumn. With Congress locked in a bipartisan stalemate, lack of progress in fiscal stimulus negotiations has undermined confidence in economic stabilization and soured risk appetite.

How to Use IG Client Sentiment in Your Trading

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Over the past few days, equity markets have plunged while demand for the haven-linked US Dollar surged. In the process, the allure of anti-fiat hedges like gold fell as future inflation expectations dwindled. Looking ahead, the prospect of reimposed lockdown measures and more severe restrictions could be another election wildcard that investors have to contend with.

Gold Price Outlook

Gold prices may be on the verge of breaking a multi-week uptrend as swelling risk aversion from a spike in Covid-19 cases puts a premium on the US Dollar. This has come at the expense of the comparatively less-liquid precious metal which previously rose amid signs of economic stabilization and optimistic expectations of inflation.

Gold Prices – Daily Chart

Chart showing gold prices

XAU/USD chart created using TradingView

If the slope of appreciation is invalidated, immediate support may be found at 1875.70 where selling pressure may briefly abate. However, if that floor is also broken, the next level to be tested may be the inflection point at 1810.33.

— Written by Dimitri Zabelin, Currency Analyst for DailyFX.com

To contact Dimitri, use the comments section below or@ZabelinDimitrion Twitter





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US Dollar in the Hot Seat as Election Nears

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USD PRICE OUTLOOK: ELECTION RISK, STIMULUS UNCERTAINTY, EQUITY EARNINGS & COVID-19 GUIDELINES KEY CATALYSTS FOR US DOLLAR VOLATILITY

  • The US Dollar looks primed for elevated volatility this week due to a collision of key risk drivers
  • DXY Index pivots higher as COVID-19 cases mount and market sentiment deteriorates broadly
  • USD price action is strengthening amid intensifying uncertainty around the election, stimulus

The US Dollar advanced broadly on Monday. Souring risk appetite largely explains the bid beneath top safe-haven currencies and latest boost to USD price action. This largely follows a breakdown in major stock indices. It appears that market sentiment is deteriorating primarily on the back of mounting COVID-19 cases globally and fading optimism for a fiscal stimulus deal. Not to mention, with a barrage of equity earnings on tap this week, and the November 2020 election right around the corner, traders could be unwinding risk exposure in light of heightened uncertainty.

Trading Forex News: The Strategy

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US DOLLAR INDEX PRICE CHART: DAILY TIME FRAME (19 JUN TO 26 OCT 2020)

US Dollar Index Price Chart USD Forecast

Chart by @RichDvorakFX created using TradingView

The collision of key macro risk drivers this week might exacerbate US Dollar volatility and contribute to lacking conviction for a directional bias. That said, there could be potential for the DXY Index to continue oscillating around its 50-day simple moving average until clarity emerges after the US election.

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If risk aversion gains traction, however, US Dollar bulls could attempt to eclipse last week’s high and make a push toward September’s top. On the other hand, breaching last week’s low might increase potential for USD price action to extend its bearish slide back toward multi-year lows, but this scenario seems less likely with the broader US Dollar bouncing off its lower Bollinger Band.

USD PRICE OUTLOOK: US DOLLAR IMPLIED VOLATILITY TRADING RANGES (1-WEEK)

USD Price Chart US Dollar Outlook Implied Volatility Trading Ranges

Yet, according to the latest US Dollar implied volatility readings, USD price action is expected to be relatively tame. US Dollar one-week implied volatility readings look relatively in-line with their respective 20-day averages and seem muted when ranked on a 5-year percentile basis as well. This highlights potential for trader complacency and larger-than-expected moves across major currency pairs if volatility accelerates on the back of fundamental catalysts noted above.

USD Forecast

USD Forecast

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Also worth mentioning, the DailyFX Economic Calendar details several other high-impact data releases and risk events on the docket this week with potential of contributing to US Dollar volatility more broadly. EUR/USD price action might swing violently in response to the scheduled European Central Bank rate decision. GBP/USD could steal the spotlight as the latest Brexit headlines cross market wires. USD/JPY and AUD/USD both look susceptible to sizable reactions this week as well with upcoming inflation reports in focus. Options-implied trading ranges are calculated using 1-standard deviation (i.e. 68% statistical probability price action is contained within the implied trading range over the specified time frame).

Keep ReadingUS Dollar (USD) Presidential Election Performance May Prove Anything but Typical

— Written by Rich Dvorak, Analyst for DailyFX.com

Connect with @RichDvorakFX on Twitter for real-time market insight





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Pound Holds Steady on Brexit Deal Optimism By Investing.com

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© Reuters.

By Yasin Ebrahim

Investing.com – The pound held steady against the dollar on Monday, shrugging off renewed demand for the safe-haven greenback on expectations the U.K. and EU will eventually reach a Brexit deal after both sides agreed to push out the deadline to reach a consensus. 

fell 0.13% to $1.3024.

Brexit talks, which resumed last Thursday, were extended to Wednesday, when EU Brexit negotiator Michel Barnier is expected to attempt to bridge some of the divide between the U.K. and EU.

Ahead of the talks, Barnier’s effort to clinch a deal could receive a boost on hopes German Chancellor Angela Merkel may be able persuade French President Emmanuel Macron to ease his stance on the key sticking point of fishing rights.

Britain has stressed that it prefers to take control over access to its waters, when the Brexit transition period ends. Macron, however, fears that a softer stance on fisheries could see French fishermen sacrificed.

The optimism on progress this week had been tempered somewhat following reports the U.K. is waiting until after the U.S. election to reveal its negotiation strategy as a Joe Biden victory could weaken Britain’s negotiation stance. Biden had previously stressed that a U.K.-U.S. deal would depend on Britain securing a deal with the EU.

British Prime Minister Boris Johnson, however, said Brexit and the U.S. election result were “entirely separate,” according to U.K. media reports.  

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.





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