EURUSD Breaks Below 1.12, GBPUSD Drops on Brexit Deadlock - US Market Open

2019-04-02 13:00:00

MARKET DEVELOPMENT –EURUSD Breaks Below 1.12, GBPUSD Drops on Brexit Deadlock

GBP: As the Brexit impasse continues with MPs failing to reach a majority on any Brexit alternatives in yesterdays indicative votes, the Pound subsequently gave up its recent gains with the currency hovering around 1.3020 against the greenback (at time of writing). Headline risk remains elevated as we move towards April 12th, focus will be on the fallout of today’s cabinet meeting. On the data front, the construction PMI remained contractionary territory for a second consecutive month for the first time since August 2016. Eyes on tomorrows services PMI.

AUD: Overnight, the RBA kept interest rates unchanged at 1.50%, however, the Australian Dollar dipped in reaction to the more cautious statement. In the near-term AUDUSD topside looks to be somewhat limited with $3.7bln worth of vanilla options rolling off at 0.71 throughout the week, while the 50 and 100DMAs reside at 0.7118 and 0.7150 respectively. Key support remains situated at the psychological 0.70 handle.

EUR: Subdued price action in the Euro this morning, which has posted a tight 27pip range, albeit at the lower end of the longer-term range with EURUSD briefly breaking below the 1.12 handle.