Sterling (GBP) Turnaround on Data Beat and Brexit Commentary - Webinar
- UK PM Johnson stresses that he wants a Brexit deal by October 31.
- UK data beats. Next up UK jobs, wages and employment.
- ECB meeting on Thursday may be a game-changer for the Euro.
After opening the week with losses, Sterling performed a quick hand-brake turn and soared into positive territory on a data/Brexit combination. Over in Ireland, PM Boris Johnson told Taoiseach Leo Varadkar that the UK would prefer a deal to a no-deal by October 31, saying that no-deal would be a ‘failure of statecraft’. A slight change of tone but enough to give Sterling a leg higher after earlier, better than expected, UK data had underpinned the British Pound.
GBPUSD 30 Minute Price Chart (September 5 -9, 2019)
IG Client Sentiment data show that of retail traders are 66.7% net-long of GBPUSD, a bearish contrarian indicator. However, recent daily and weekly positional changes give us a stronger bearish contrarian trading bias.
One pair discussed during the webinar was EURGBP which may see heightened volatility this week ahead of the ECB monetary policy meeting on Thursday. The central bank is expected to cut the deposit rate by 10 basis points to -0.50% and either announce or embark on a fresh QE program to help stave off recessionary pressures in Europe.
Any further Brexit good news combined with a dovish ECB could see the pair challenge recent lows at 0.8892 before heading towards the 200-day moving average currently at 0.8817.
EURGBP Daily Price Chart (December 2018 – September 9, 2019)
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