Sterling Price Mixed Ahead Of Key Speech By Theresa May
|Global markets were mixed today after data from China confirmed that the country’s economy is weakening. The GDP numbers from the country showed that the economy expanded by 6.4% in the fourth quarter, which was a point lower than the 6.5% growth in the third quarter. It was the slowest growth rate since 2009. In the aftermath, Chinese stocks rose as investors priced in a stimulus package from the government. In Europe, stocks declined with the DAX and the Stoxx shedding 45 and 10 points respectively.
The sterling was mixed today ahead of a key speech by Theresa May. In the speech, she will outline her key goals in the upcoming negotiations on Brexit. A report by Bloomberg said that the premier had given up on a bipartisan approach to the fresh negotiations. As such, she will work with her party and coalition partners to come up with a deal that will be acceptable by the European Union as well. On its part, the EU is torn between extending the Brexit deadline by one year to give time for the UK to come up with an acceptable deal.
In the United States, the government shutdown continued for the fourth week. This is the longest government shutdown in history and there are concerns that it could continue for the foreseeable future as disagreements between Donald Trump and congressional leaders continue. The main issue in the shutdown is on how to address Trump’s border wall and other immigration issues. Over the weekend, Trump offered a deal that would allow continued protections for the ‘Dreamers’ (a program that shields young undocumented immigrants from deportation) as well as increasing humanitarian aid. Democrats rejected the offer and asked the president to open the government first.
The EUR/USD pair declined today after weaker than expected data from the European Union. The pair reached an intraday low of 1.1350. On the hourly chart, the pair’s price is below the three-week and six-week moving averages while the RSI is slightly above the oversold level of 30. The parabolic SAR has flattened, which is an indication that the pair could breakout in either direction. This will mostly depend on the decision of the ECB later this week. Most analysts expect the bank to hike rates in October.
GBP/USD
The GBP/USD pair was little moved today as traders waited for the way forward from Theresa May. After declining to an intraday low of 1.2830, the pair then rose to an intraday high of 1.2885. On the four-hour chart below, the pair’s price is along the 21-day and 42-day EMAs, while the momentum and average true range index indicators have eased a bit. The pair will likely remain along this range until Theresa May’s speech later today.
XAU/USD
The price of gold declined to a low of $1275 per ounce. This was a sharp decline from the YTD high of $1298, that was reached a week ago. On the four-hour chart, the current price of $1277 is below the short and medium-term EMAs. It has also broken past the important support of $1279 that is shown below. This means that the pair could continue moving down to potentially test the important level of $1260, which is also the 61.8% Fibonacci Retracement level.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.