Sterling Sinks on News Flow

Stuart Cowell HFM

GBPUSD & GBPJPY, H1

With 5 weeks until the UK is scheduled to leave the EU, Brexit news remains front and centre for Sterling traders. A flurry of news and gossip regarding further political resignations and defections continues to to undermine Her Majesty’s currency today.

It started positively, with the Irish Foreign Minister (Simon Coveney) saying the EU were working with UK to give “reassurances” on the backstop and that no Deal was a “lose, lose, lose”¹. The comments helped Cable post a day high at 1.3050, however, the news flow since has weighed on the pound, pushing Cable to a low below the 200 EMA at 1.2967 (T2 from the break of the 20 MA yesterday at 20:00).

GBPJPY meanwhile, has fallen from a high of 144.50 at the daily pivot point, through S1 at 144.00 to 143.80 (9 pips above T2 at 143.71). The drive lower has been, another MP resigning from the main opposition Labour Party², rumours of further resignations from Labour and the governing Conservative Party and that there will be no Brexit “Deal in the Desert” when Mrs May and other EU leaders at a summit with Arab leaders this weekend³.

¹https://www.irishtimes.com/news/politics/no-deal-brexit-is-a-lose-lose-lose-says-coveney-1.3802735

²https://www.bbc.com/news/uk-politics-47330079

³https://uk.reuters.com/article/uk-britain-eu-nodeal/some-conservative-mps-warn-may-they-are-ready-to-back-brexit-delay-idUKKCN1QB18V

Author

Stuart Cowell

HFM

With over 25 years experience working for a host of globally recognized organisations in the City of London, Stuart Cowell is a passionate advocate of keeping things simple, doing what is probable and understanding how the news, c

EUR/USD hits two-day highs near 1.1820

EUR/USD picks up pace and reaches two-day tops around 1.1820 at the end of the week. The pair’s move higher comes on the back of renewed weakness in the US Dollar amid growing talk that the Fed could deliver an interest rate cut as early as March. On the docket, the flash US Consumer Sentiment improves to 57.3 in February.

GBP/USD reclaims 1.3600 and above

GBP/USD reverses two straight days of losses, surpassing the key 1.3600 yardstick on Friday. Cable’s rebound comes as the Greenback slips away from two-week highs in response to some profit-taking mood and speculation of Fed rate cuts. In addition, hawkish comments from the BoE’s Pill are also collaborating with the quid’s improvement.

Gold climbs further, focus is back to 45,000

Gold regains upside traction and surpasses the $4,900 mark per troy ounce at the end of the week, shifting its attention to the critical $5,000 region. The move reflects a shift in risk sentiment, driving flows back towards traditional safe haven assets and supporting the yellow metal.

Crypto Today: Bitcoin, Ethereum, XRP rebound amid risk-off, $2.6 billion liquidation wave

Bitcoin edges up above $65,000 at the time of writing on Friday, as dust from the recent macro-triggered sell-off settles. The leading altcoin, Ethereum, hovers above $1,900, but resistance at $2,000 caps the upside. Meanwhile, Ripple has recorded the largest intraday jump among the three assets, up over 10% to $1.35.

Three scenarios for Japanese Yen ahead of snap election

The latest polls point to a dominant win for the ruling bloc at the upcoming Japanese snap election. The larger Sanae Takaichi’s mandate, the more investors fear faster implementation of tax cuts and spending plans.

XRP rally extends as modest ETF inflows support recovery

Ripple is accelerating its recovery, trading above $1.36 at the time of writing on Friday, as investors adjust their positions following a turbulent week in the broader crypto market. The remittance token is up over 21% from its intraday low of $1.12.