GBP: Volatility in potential Brexit outcomes has increased - Nordea

Ross J Burland FXStreet

Analysts at Nordea explained that sterling has been hammered (in particular versus the USD) by comments from both Mark Carney and Trade Secretary Liam Fox hinting that the implied probability of a no-deal Brexit is on the rise.

Key Quotes:

"At the same time as the no-deal scenario looks increasingly likely, calls for a new referendum are also gaining traction in the UK – and judging from betting markets, the implied odds of Britain actually exiting the EU by March 29 next year has fallen below 50%, in the aftermath of Carney and Fox’s comments."

"This development widens the potential outcome space of the Brexit-negotiation severely."

"Odds of a hard and sudden Brexit are on the rise and the chance of a new referendum or a material prolongation of the negotiation-process the same, while the likelihood of an orderly exit by March 29 seems to vanish by the day. This leaves a tricky scenario ahead for Bank of England, as they try to limit the downside in GBP due to inflation considerations. The best way to bet on GBP weakness is via short cable still (rallies above 0.90 in EUR/GBP should be sold into)."

Author

Ross J Burland

FXStreet

Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.

EUR/USD tests nine-day EMA support near 1.1850

EUR/USD inches lower during the Asian hours on Monday, trading around 1.1870 at the time of writing. The 14-day Relative Strength Index momentum indicator at 56 stays above the midline, confirming improving momentum. RSI has cooled from prior overbought readings but stabilizes above 50, suggesting dips could stay limited before buyers reassert control.

GBP/USD flat lines as traders await key UK macro data and FOMC minutes

The GBP/USD pair kicks off a new week on a subdued note and oscillates in a narrow range, just below mid-1.3600s, during the Asian session. Moreover, the mixed fundamental backdrop warrants some caution for aggressive traders as the market focus now shifts to this week's important releases from the UK and the US.

Gold slides below $5,000 amid USD uptick and positive risk tone; downside seems limited

Gold attracts fresh sellers at the start of a new week and reverses a part of Friday's strong move up of over $150 from sub-$4,900 levels. The commodity slides back below the $5,000 psychological mark during the Asian session, though the downside potential seems limited amid a combination of supporting factors.

Bitcoin, Ethereum and Ripple consolidate within key ranges as selling pressure eases

Bitcoin and Ethereum prices have been trading sideways within key ranges following the massive correction. Meanwhile, XRP recovers slightly, breaking above the key resistance zone. The top three cryptocurrencies hint at a potential short-term recovery, with momentum indicators showing fading bearish signs.

Global inflation watch: Signs of cooling services inflation

Realized inflation landed close to expectations in January, as negative base effects weighed on the annual rates. Remaining sticky inflation is largely explained by services, while tariff-driven goods inflation remains limited even in the US.

Ripple Price Forecast: XRP potential bottom could be in sight

Ripple edges up above the intraday low of $1.35 at the time of writing on Friday amid mixed price actions across the crypto market. The remittance token failed to hold support at $1.40 the previous day, reflecting risk-off sentiment amid a decline in retail and institutional sentiment.