Sterling steps out previous range, touching 1.26

Posted 11 December, 2018

Following practically five-week-long slackening, the sterling has managed to break the 1.25 handle (the bottom of April 2017) and moved up to the 1.26 line, which is now believed to be the last frontier on the downward track. Today the currency is said to stabilize slightly standing somewhat above $1.26. However, the Brexit tensions persist, and thus more active buying is unlikely to be seen now, while profit-taking is highly possible.

In fact, the market receives numerous unclear signals from the Brexit front. Specifically, Ireland now leaves open a possibility of changes to the Ireland boundary agreement, while earlier this party of the agreement refused point-black to amend the deal. Meantime in Europe, the officials press not to provide any comment on backstop to Theresa May.

As for today, the UK Prime Minister will hold numerous meetings, in particular with Irish representative, Germany’s leader, Jean Claude Juncker and Tusk. The further sterling movement will partly depend on how these talks pass. However, with Brussels’ firm stance, we are unlikely to see any dramatic progress in negotiations between Theresa May and Juncker.

With all the above, the observed local recovery driven by unexpectedly good performance of the UK labour market can give a chance for profit taking as well as the opening of new shorts at a higher price.

Previous forecast

12 December, 2018 14:32

← Upcoming ECB meeting makes euro less attractive

After being slack for about two days, the euro has shown some upturn against the US dollar in the middle of the week. However, the euro-to-US dollar pair remains in the red before the release of the US inflation data and the meeting of the European Central Bank, the week milestones. The bearish messages of Mario Draghi may only expand pressure on the euro. For reference, the currency is depressed from many fronts (Italy, UK, France). As a result, the euro start losing its attractiveness in case of more signs of the political crisis spreading in Europe.

Upcoming ECB meeting makes euro less attractive

Next forecast

10 December, 2018 14:59

US dollar moves and Italian budget issue in focus of euro →

Following last Friday, the US dollar keeps facing selloffs on Monday. At the end of last week, the situation was entailed by a weak labour market report. For now, the US Dollar index hiked to $96.63. The sterling is unstable in view of the upcoming voting in the UK parliament. However, the currency shows more modest changes unlike the euro, which managed to the November peaks at $1.1440, though then it slightly dipped though remains in the black anyway.

US dollar moves and Italian budget issue in focus of euro
Write a comment
Prove you’re not a bot + 7 = 24