News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
EUR/USD
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Oil - US Crude
Bullish
Wall Street
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Gold
Bullish
GBP/USD
Mixed
USD/JPY
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
More View more
Real Time News
  • Tesla boss Elon Musk is seemingly running the cryptocurrency market single-handed this week with his tweets prompting a massive sell-off before today’s sharp rally. Get your market update from @nickcawley1 here: https://t.co/qGci02osOP https://t.co/Yp24Sakrfl
  • What suits your style of trading stocks or commodities? Find out what are the differences in these two markets here: https://t.co/BnA07cMV0s https://t.co/LDP3HlN4A3
  • GBP/USD on the front foot to close the week. Bulls aim for YTD peak, while EUR/GBP range is maintained. Get your market update from @JMcQueenFX here: https://t.co/neGBchlJ0O https://t.co/KME51FSF0D
  • What's the difference between leading and lagging indicators? Find out from here: https://t.co/vGx8HCrRwD https://t.co/7w5jodyzj0
  • Dealing with the fear of missing out – or FOMO – is a highly valuable skill for traders. Not only can FOMO have a negative emotional impact, it can cloud judgment and overshadow logic. Learn how you can control FOMO in your trading here: https://t.co/lgDf5cVYOn https://t.co/L3LPCph2ST
  • Make smart trading decisions with your free guide to trade the news. Download your free guide here.https://t.co/pb5E2KgRzW #DailyFXGuides https://t.co/ysxKO30ZWw
  • Currency exchange rates are impacted by several factors. Are different world leaders a contributing factor? Find out here: https://t.co/4jsORznRTE https://t.co/5nHxtlZ7nn
  • Risk management is one of the most important aspects of successful trading, but is often overlooked. What are some basic principles or risk management? Find out from @PaulRobinsonFX here: https://t.co/IsnpfJhp91 https://t.co/lqpXwWjVFt
  • Looking for a new way to trade reversals? One of the most used reversal candle patterns is known as the Harami. Like most candlestick formation patterns, the Harami tells a story about sentiment in the market. Get better with trading reversals here: https://t.co/rfwUWJfbz9 https://t.co/CrpXuYgfRO
  • MACD who? The Moving Average Convergence Divergence (MACD) is a technical indicator which simply measures the relationship of exponential moving averages (EMA). Find out how you can incorporate MACD into your trading strategy here: https://t.co/ZNs4Qi8ieG https://t.co/VzEbQn8blk
FTSE 100 Analysis: Default Safe-Haven on No-Deal Brexit Risk as Sterling (GBP) Collapses

FTSE 100 Analysis: Default Safe-Haven on No-Deal Brexit Risk as Sterling (GBP) Collapses

Justin McQueen, Analyst

FTSE 100 Analysis and News

  • GBP/USD Slumps as Hard Brexit Risks Mount
  • FTSE 100 a Safe Haven?

GBP/USD Slumps as Hard Brexit Risks Mount

Yesterday saw the Pound experience its largest 1-day decline against the US Dollar in 2019, dropping 1.25% with the currency trading at the lowest level since March 2017. This came amid Boris Johnson and his cabinet ministers continuing to show a hardened stance towards the EU with Michael Gove stating that the government are working on the assumption that the EU would not strike a fresh Brexit agreement. Consequently, in light of the plummet seen in GBP, this was to the beneficiary of the FTSE 100, which jumped to fresh 2019 highs.

As mentioned last week, given that Boris Johnson government is unlikely to reduce the current uncertainty and with his rhetoric that he is willing to carry out a no-deal Brexit, the FTSE 100 would stand to outperform on the basis that the weak Pound supports FTSE 100 profitability with 2/3 of the revenue from the top 100 companies generated overseas.

FTSE 100 a Safe Haven?

As Brexit uncertainty continues to weigh on the Pound, it can be argued that the FTSE 100 is a potential safe haven with investors rotating from domestic assets (FTSE 250 or GBP) to more internationally exposed. Since the backend of 2016, the FTSE 100 and the Pound have had a sizeable negative correlation with the correlation becoming increasingly more negative at times when Brexit uncertainty (no-deal Brexit risks) rises. Therefore, showing signs that the default trade on rising hard Brexit risks is a move into the FTSE 100. However, with that said, just like the initial reaction to the Brexit referendum, if the UK were to confirm that they were heading for a no-deal Brexit, it is likely that the Pound and FTSE 100 would head lower.

FTSE 100 Analysis: Default Safe-Haven on No-Deal Brexit Risk as Sterling (GBP) Collapses

FTSE 100 Price Chart: Daily Time Frame (Apr 18 – Jul 19)

FTSE 100 Analysis: Default Safe-Haven on No-Deal Brexit Risk as Sterling (GBP) Collapses

Chart by IG

KEY TRADING RESOURCES:

--- Written by Justin McQueen, Market Analyst

To contact Justin, email him at Justin.mcqueen@ig.com

Follow Justin on Twitter @JMcQueenFX

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES