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FX Update: GBP concern notches higher.Summary: Sterling concern on the Brexit talks status lurched a few notches higher as the UK refuses to sit down for renewed talks until the EU makes concessions. Elsewhere, dovish jawboning overnight from an RBA official as the market shifting its expectations lower for the rate cut at the November 3 RBA meeting. Elsewhere, today is the deadline for US House Speaker Pelosi on pre-election US stimulus talks. Trading focus: Sterling concern notches higher on stand-off over further talks The situation for sterling has taken a sudden turn that is finally seeing the market a bit less complacent. The prior focus was on the supposed promise brought about by changes to the controversial Internal Market Bill, key clauses of which the EU found unacceptable and would violate the Brexit withdrawal agreement. But now we have a more serious twist as the UK side refuses to sit down for new talks with the EU unless the latter makes key concession. Sterling is feeling the heat and could price in further concern here to the downside if the stand-off continues and prevents the resumption of talks. Looking over at GBPUSD, the move is still rather modest relative to a chunkier move in EURGBP, suggesting that the sterling downside thus far is still quite modest, so there is far more pain to price into sterling if the UK is willing to dig in. Chart: EURGBP EURGBP has jumped to attention., but the market still looks rather complacent relative to the potential risks if the UK digs in and is willing to take the situation to the wire without concession from its side. To threaten 0.9000 again, we’ll first need for talks to resume because the EU has made a sufficiently large concession to permit re-engagement. Hard to believe that the UK side will blink first. The upside potential is considerable in range terms, but may prove capped untill/unless the market is sure that a no deal is in the cards. Aussie bashed further on more RBA jawboning The Aussie sell-off had stalled a bit yesterday and the currency was only dragged a bit lower later in the session on an ugly late session in US equities before more RBA jawboning overnight dragged the currency a bit lower still. The RBA’s Kent claimed in an interview that there is further room to “compress” rates and said he wouldn’t be surprised if the shortest rates dipped below zero at some point. This has the market pricing nearly zero rates at the November RBA meeting (implied rate at 4.4 bps – so some seeing a cut from the current 0.25% to 0.10% while others lean for a full ZIRP.) Were the Chinese yuan not setting nearly daily highs against the US dollar, the AUD would surely be lower – it is definitely a factor in the mix. US stimulus deadline supposedly up today. Not much to add on the US stimulus front save for the fact that a definitive headline either way may be on the way and move markets considerably over the next 12-18 hours (today is House Speaker Pelosi’s deadline for a deal if something to be passed before the election). The most confusing aspect is perhaps less whether House Speaker Pelosi and Treasury Secretary Mnuchin can come to terms, but more whether Senate Republicans are willing to sign for a larger deal Trump seems willing to do as they may be burning bridges to Trump in anticipation of a thumping for their party at the election. A no-go on stimulus ´would likely support the USD and JPY and weaken risk sentiment. Euro resilience despite ugly Covid-19 news flow. The firm euro today is a tough one to wrap our heads around unless it is the news of the massive interest in the first proper join EU bond issue, which was said to be massively over-subscribed today. On the negative side, Covid-19 numbers in Europe are terrible as we await the flash PMI numbers for October on Friday. New virus-linked restrictions include a total shutdown in Ireland at the highest Level 5 severity, with people essentially told to shelter in place. German Bund yields have been driven to their lowest level in recent days since the worst week around the March Covid-19 linked market meltdown. John Hardy Head of FX Strategy Disclaimer The Saxo Bank Group entities each provide execution-only service and access to Analysis permitting a person to view and/or use content available on or via the website. This content is not intended to and does not change or expand on the execution-only service. 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by Saxo
ridethepig | EURGBP Market Commentary 2020.09.16📌 A quick update here for those trading the flows in EURGBP (yes a change of scenery from the cable battlefield). To maintain the uptrend buyers must defend on their outpost. Rightly so, this is a tempting support level to buy as buyers have to prevent the elegant threat from sellers to breakdown and reclaim the 0.90xx handle. In spite of Brexit, the main impact comes on GBP rather than EUR and for those reasons this leg is still being driven from the overarching Pound flows. Another three barrel bluff from Johnson and we are at the mercy to the House of Lords although unlikely they can defend this one. No-deal Brexit looks certain, the cross here can launch to the topside in a +/- 10% move as sterling has to weaken. Adding longs on dips into 0.915x/0.913x for the swing into 0.931x and beyond. Thanks as usual for keeping the feedback coming 👍 or 👎
Long
by ridethepig
4
EURGBP: Key Weekly Supply Zone Ahead!!! hey traders, +4.5% growth during the last 10 days on EURGBP. Pound keeps losing its grounds on brexit news. however, based on 3 days chart analysis you can see that the market is facing a crucially important zone of supply. its lower boundary - 0.93 level is based on 2019's structure high (immediate bearish reaction followed and -10% drop) its upper boundary - 0.95 is based on 2020's structure high (immediate bearish reaction followed and -8% drop). + the projection of the last bullish impulse from the higher low is lying perfectly within that zone. chances will be high that the underlined area will be respected and we will see a pullback. I will be looking for short opportunities once the market enters that area. have a great weekend!
Short
by VasilyTrader
33
Some lovely open positions - 5 min quick recap!Some momentum entering the markets over the last week to 10 days as move into the last month of the quarter. Summer months can lack trading volume, so lets see how the quarter end. We currently have a couple of projects ongoing with out community so we have been a little quiet on here over the last few days. I thought I would share however, a quick recap on some lovely developing moves. Its only 5 mins, grab a brew and have a watch! Thank you Darren
by pow_removetheguesswork
3
EUR/GBP 7/8/2020Welcome to this analysis on EUR/GBP. EUR/GBP broke above the key level of resistance at 0.907 on the 26th of June but since then it failed to hold the level as support, It deviated above the level and broke below it. On the 1st and 6th of July, it retested the level and got rejected from it and created a Head and Shoulders reversal below the level. The Head and Shoulders got confirmed by a break and close below the local S/R level of the pattern at 0.9 and now it is retesting the level as resistant again which can be a good entry for a short trade. The target of the Head and Shoulders pattern is around 0.882 as long as it stays below the neckline and the right shoulder of the patter. There are some support zones at 0.892 and 0.887 in above the price target. This trade idea has 2.5 rewards to risk ratio. Good luck trading!
Short
by Trader_Shayan
EURGBP CHANNEL LONG|RSI OVERSOLD|3:1 RISK REWARDHi there. EURGBP upward channel is unbroken and stands strong.Now there is a comfortable spot for us to enter. However, the price is currently below the relatively strong horizontal resistance area, which, gives us less than 50% probability. Despite that, I say, that the channel is strong, and there cant be a better point for entry than here, from the risk-reward perspective, so the <50% probability is compensated by 1-3:1 risk reward, 2-orversold RSI, which helps to etch the probability in our favor. Use 0.7% of deposit. NOTE: maybe, buy 0.5% now and add 0.5% if the price reaches the resistance of the channel. You'll get great average price this way. Thank you for reading, like and subscribe and have a nice day!
Long
by ProSignalsFx
5