Never miss a story from DailyFX

Subscribe to recieve updates on publications
Please enter valid First Name
Please fill out this field.
Please enter valid Last Name
Please fill out this field.
Please enter valid email
Please fill out this field.
Please select a country

I’d like to receive information from Daily FX and IG about trading opportunities and their products and services via email.

Please fill out this field.

Your Forecast Is Headed to Your Inbox

But don't just read our analysis - put it to the rest. Your forecast comes with a free demo account from our provider, IG, so you can try out trading with zero risk.

Your demo is preloaded with £10,000 virtual funds, which you can use to trade over 10,000 live global markets.

We'll email you login details shortly.

Learn More about Your Demo

You are subscribed to DailyFX

You can manage you subscriptions by following the link in the footer of each email you will receive

An error occurred submitting your form.
Please try again later.

To get the Asia AM Digest every day, SIGN UP HERE

The British Pound led the way higher yesterday, buoyed by reports of an imminent post-Brexit Irish border deal. The thorny issue of how the dividing line between Northern Ireland and the Republic of Ireland will work after the UK leaves the EU sank an almost-there accord earlier this week.

The US Dollar continued to push higher amid reports that President Donald Trump will unveil an infrastructure spending plan in early January. That might amplify upward pressure on inflation from a tax cut effort now making its way through Congress, leading to a steeper Fed rate hike cycle.

Rates-sensitive currencies at both ends of the yield spectrum – the Australian and New Zealand Dollars at the top and the Yen at the bottom – were sent dutifully lower by the prospect of higher US borrowing costs. A broad improvement in sentiment compounded pressure on the perennially anti-risk Japanese unit.

DailyFX Economic Calendar: Asia Pacific (all times in GMT)

Asia AM Digest: Pound Soars as Brexit Deal Prospects Brighten

DailyFX Webinar CalendarCLICK HERE to Register (all times in GMT)

Asia AM Digest: Pound Soars as Brexit Deal Prospects Brighten

IG Client Sentiment Index Chart of the Day: EUR/USD

Asia AM Digest: Pound Soars as Brexit Deal Prospects Brighten

CLICK HERE to learn more about the IG Client Sentiment Index

Retail trader data shows 41.7% of traders are net-long EUR/USD, with the ratio of traders short to long at 1.4 to 1. The number of traders net-long is 0.3% higher than yesterday and 7.6% higher from last week, while the number of traders net-short is 3.4% lower than yesterday and 3.5% lower from last week.

We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests EUR/USD prices may continue to rise. Yet traders are less net-short than yesterday and compared with last week. Recent changes in sentiment warn that the current EUR/USD price trend may soon reverse lower despite the fact traders remain net-short.

Five Things Traders are Reading

  1. Yen Looks Past Local Data to US News, USD/JPY Chart Warns of Top by David Cottle, Analyst
  2. Pre-NFP Price Action Setups Across the U.S. Dollar by James Stanley, Currency Strategist
  3. Near-term Setups in GBP/USD, NZD/JPY, and AUDJPY by Michael Boutros, Currency Strategist
  4. Becoming a Better Trader: 3 Principles of Price Action Analysis by Paul Robinson, Market Analyst
  5. Bitcoin Price Surges Above $15,000; More Valuable than Visa by Nick Cawley, Analyst

To get the Asia AM Digest every day before the Tokyo cash equity open, sign up here

To get the US AM Digest every day before the US cash equity open, sign up here

To get both reports daily, sign up here