GBPUSD

The Sterling slumped against US dollar to 1.2825 on Wednesday and reached to the lowest point since February. The news around Brexit is still dominating the Sterling, the news broke that the opposition Labour Party has refused to rule out abstaining in the vote of the second reading of the EU Withdrawal Bill if there is no deal with the government. While PM May, on the other hand, plans to pass her Brexit deal through the Parliament in the first week of June, still struggling to build a majority. Apparently, the market doesn’t buy her new attempt, without giving up some of her red lines, something she clearly won't do.

Although the unemployment rate released on Tuesday dropped down to 3.8% and reached a 40-year low, the Pound didn’t better off from that whatsoever. The market attention is drawn by the fourth vote on Brexit, however, the bears are betting on another failure, which led Sterling to a series of slump these two weeks.

GBPUSD

GBP/USD Daily Chart

GBP has been dropping for 8 trading days in a row except last Thursday, where there was a Doji on daily chart. The downward trend is very strong, which pulls the GBP back down below the downward trend line starting from 13th of March. The trend for GBP recently will remain downward, the first support level is previous low at 1.2772.

However, the GBP has reached the lower bound of Bollinger Bands, while the 3-period RSI has reached 4.6 closing to an extreme level. It indicates there might be a correction coming in towards 20-day moving average at 1.2987.

 

AUDUSD

Aussie fell against the greenbacks on Wednesday for the 3rd trading day in a row, reached a new low since early January at 0.6913. As the trade negotiations continue to weight heavily on Aussie, the not so optimistic expectation put further pressure on Aussie. The Greenback found some support overnight U.S. President Donald Trump signed an executive declaring a national emergency over “threats against information and communications technology and services” in the US.

This Thursday, Australia will release April employment data. The country is expected to have added 14.0K new jobs in the month, while the unemployment rate is seen ticking 0.1% higher to 5.1%.

AUDUSD

AUD/USD Daily Chart

The Aussie has been dropping against USD starting from this week for over 70 pips, and touched on the lower bound of the Bollinger Bands yesterday. The downward trend is clear as the Aussie has been traded under the 20 days moving average since 23rd of April. The 3-period RSI is at 7.9 close to an extreme level while the 14-period RSI is sitting at 30. The Aussie is very weak in general, and the US dollar index is in an upward trend after hitting the lower bound of the uptrend channel. It indicates the Aussie may face further slump in the future.

Major Economic Events happening this week (AEDT Time Zone)

Economic Event (Date)

Previous

Forecasted

Actual

AU – NAB Business Confidence (14 May)

0

1

0

DE – Inflation Rate YY Final (14 May)

1.3%

2%

2%

GB – Claimant Count Change (14 May)

28.3K

24.2K

24.7K

DE – ZEW Economic Sentiment Index (14 May)

3.1

5

-2.1

AU – Westpac Consumer Confidence Index (15 May)

100.7

100.4

101.3

DE – GDP Growth Rate QQ Flash (15 May)

0%

0.4%

-

CA – Inflation Rate YY (15 May)

1.9%

2%

-

US – Retail Sales MM (15 May)

1.6%

0.3%

-

AU – Unemployment Rate (16 May)

5%

5.1%

-

US – Michigan Consumer Sentiment (18 May)

97.2

97.5

-

The information contained in this website is of general nature only and does not take into account your objectives, financial situation or needs. Please ensure that you read the Financial Services Guide (FSG), Product Disclosure Statement (PDS), and Terms and Conditions which can be obtained on our website https://www.aetoscg.com.au, and fully understand the risks involved before deciding to acquire any of the financial products listed on this website.

AETOS Capital Group Pty Ltd is registered in Australia (ACN 125 113 117; AFSL No. 313016) since 2007 and is a wholly owned subsidiary of AETOS Capital Group Holdings Ltd, carrying on a financial services business in Australia, limited to providing the financial services covered by the Australian financial services licence.

Trading margin FX and CFDs carries a high level of risk and may not be suitable for all investors. You are strongly recommended to seek independent financial advice before making any investment decisions.

This commentary is owned by AETOS, and copying, reproduction, redistribution and/publishing of this material for any purpose in whole or in part without the prior written consent of AETOS is prohibited.

Analysis feed

Latest Forex Analysis

Editors’ Picks

EUR/USD: Under pressure below 1.1245 while consolidating Dollar's resurgence

EUR/USD dropped from 1.1260 to just above 1.1200 overnight. The markets continued to price 31bp of easing at the 31st July meeting though Fed funds futures for 2020 rose about 3bp in implied yield.

EUR/USD News

GBP/USD: Recovery underway as traders await UK CPI for fresh direction

A minor correction in the US dollar across its main competitors appear to prompt a recovery in GBP/USD from 27-month lows, as the rates hold above the 1.24 handle ahead of the UK CPI data. 

GBP/USD News

USD/JPY rejected at 200-hour MA amid losses in Asian equities

USD/JPY is currently trading near 108.15, having faced rejection at the 200-hour moving average of 108.33 earlier today. The JPY is bid, possibly due to losses in equities. Also, Fitch Ratings' affirmation of Japan's rating at 'A' buoys the Yen.

USD/JPY News

UK CPI Preview: Brexit above all else

The monthly change in the consumer price index is expected to be flat in June down from 0.3% in May. The annual rate is predicted to be unchanged at 2 %. The core CPI rate is forecast to be flat in June, after gaining 0.2% in April.

Read more

Gold: Bulls are in the safe-zone, but are barely holding on

The 1400 psychological level is holding up which is just as well for the bulls, as a couple of dollars, a break of the 23.6% Fibo of the latest swing lows and highs could open up an onslaught to the downside.

Gold News

Majors

Cryptocurrencies

Signatures