Asia Pacific Market Open – Brexit, British Pound, US Dollar, NZD/USD
- The British Pound still finished higher despite Brexit Article 50 extension doubts
- Option expiry may have boosted USD Friday as the S&P 500 halted rising streak
- Asia stocks may consolidate as NZD/USD faces key resistance, China trade due
We recently released our Q1 forecasts for currencies like the US Dollar in the DailyFX Trading Guides page
The British Pound was arguably one of the more volatile majors on Friday, ultimately finishing the day higher on mixed Brexit news. Initially Sterling rallied on reports that an Article 50 extension could be in the cards, That notion was then downplayed by UK Prime Minister Theresa May’s spokeswoman who said that “it is government policy that this is not something we are going to do”.
GBP still finished the day higher alongside the pro-risk Australian and New Zealand Dollars. Granted this was largely thanks to the ‘risk on’ market dynamic during the first half of the trading session. Fed Chair Jerome Powell continued to offer a cautious outlook on monetary policy, leading to gains in Asia Pacific benchmark stock indexes as expected.
As demand waned for safety, the US Dollar weakened and an in-line inflation report failed to offer much upside momentum. Then, the greenback trimmed losses and an obvious catalyst seemed absent. Gains may have been due to geopolitical concerns or perhaps more likely, options expiry. The caution in sentiment due to the former may have led to the S&P 500 and crude oil prices halting their impressive winning streaks.
Asia stocks may consolidate given the mixed session on Wall Street. China will be releasing December’s trade data at an unspecified time. Technically speaking, the Australian Dollar could be on the verge of prolonging its uptrend against the US Dollar and gains against the Euro. I am also still short NZD/USD as my stop has not been breached yet. The pair looks to resistance at 0.68839 below.
NZD/USD Daily Chart
Chart created in TradingView
US Trading Session
Asia Pacific Trading Session
** All times listed in GMT. See the full economic calendar here
FX Trading Resources
- See how equities are viewed by the trading community at the DailyFX Sentiment Page
- Join a free Q&A webinar and have your trading questions answered
- See our free guide to learn what are the long-term forces driving US Dollar prices
- See our study on the history of trade wars to learn how it might influence financial markets!
--- Written by Daniel Dubrovsky, Junior Currency Analyst for DailyFX.com
To contact Daniel, use the comments section below or @ddubrovskyFX on Twitter