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
Oil - US Crude
Bullish
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
  • GDP (Gross Domestic Product) economic data is deemed highly significant in the forex market. GDP figures are used as an indicator by fundamentalists to gauge the overall health and potential growth of a country. Learn use GDP data to your advantage here: https://t.co/Yl9vM7kO6a https://t.co/otJwnuR7qe
  • The Federal Reserve System (the Fed) was founded in 1913 by the United States Congress. The Fed’s actions and policies have a major impact on currency value, affecting many trades involving the US Dollar. Learn more about the Fed here: https://t.co/ADSC4sIHrP https://t.co/s4lZWdJoXV
  • The US Dollar Index traded higher last week, sustaining its broader uptrend. Conflicting technical signals urge caution, but the directional bias remains skewed to the upside. Get your weekly USD technical forecast from @FxWestwater here: https://t.co/jcwhcsUBEN https://t.co/tKrlrRZlZn
  • Technical analysis of charts aims to identify patterns and market trends by utilizing differing forms of technical chart types and other chart functions. Learn about the top three technical analysis tools here: https://t.co/KDjIjLdTSk https://t.co/MGy9OTXpUI
  • The Australian Dollar still remains vulnerable as it extends losses against its major counterparts. What is the road ahead for AUD/USD, AUD/JPY, AUD/NZD and AUD/CAD? Get your AUD technical forecast from @ddubrovskyFX here: https://t.co/ph20zFv4qS https://t.co/v4g9ATf4rr
  • The ISM manufacturing index plays an important role in forex trading, with ISM data influencing currency prices globally. Learn about the importance of the ISM manufacturing index here: https://t.co/Xr3xtoFpZy https://t.co/De69mTseZN
  • Take a closer look visually at the most influential global importers and exporters here: https://t.co/G58J1dg6y3 https://t.co/D7AeTM5OpH
  • EUR/USD tumbled last week on the day of the ECB’s latest policy announcement, and that weakness is set to continue this week as a flood of major Eurozone economic statistics is released. Get your weekly Euro forecast from @MartinSEssex here: https://t.co/9B4rJnzWuz https://t.co/ENF3xlkuyP
  • Trading bias allows traders to make informative decisions when dealing in the market. This relates to both novice and experienced traders alike. Start learning how you may be able to make more informed decisions here: https://t.co/rz7fqi8ZEe https://t.co/Gps2Xp32h9
  • Greed is a natural human emotion that affects individuals to varying degrees. Unfortunately, when viewed in the context of trading, greed has proven to be a hindrance more often than it has assisted traders. Learn how to control greed in trading here: https://t.co/kODPAfJE79 https://t.co/hftCEho1lM
GBP/USD & GBP/JPY Stem the Bleeding on Latest Brexit News

GBP/USD & GBP/JPY Stem the Bleeding on Latest Brexit News

Christopher Vecchio, CFA, Senior Strategist

Brexit Latest Talking Points:

  • UK Prime Minister Boris Johnson suffered a defeat today in UK courts when a judge ruled that he could not prorogue parliament – in other words, he could not suspend UK parliament in order to force through a no deal, “hard Brexit.”
  • Subsiding fears of a no deal, “hard Brexit” – if only temporarily – dovetail with positive developments on the US-China trade war front. Riskier assets have been bid higher while the low yielding safe havens have lost ground.
  • Retail trader positioning suggests that the British Pound may be under more pressure heading into the final days of July.

Looking for longer-term forecasts on the British Pound? Check out the DailyFX Trading Guides.

UK Prime Minister Boris Johnson’s ambitions for a swift exit from the European Union took a hit today when a British judge ruled that he could not prorogue parliament – in other words, he could not suspend UK parliament in order to force through a no deal, “hard Brexit.”

UK Economic Data Softens as Brexit Uncertainty Looms Large

If only temporarily, fears of a no deal, “hard Brexit” have subsided as march down the path towards economic ruin for the UK has been slowed. Last week’s Q2’19 UK GDP report was surprisingly weak, with the quarterly growth rate contracting for the first time in seven years amid a dramatic fall in both imports – the weak British Pound has sapped UK consumers’ purchasing power – and exports – the uncertainty over the near-term business environment is making operational and production planning incredibly difficult for firms of all sizes.

What’s Next for the British Pound and Brexit?

The mere prospect of the UK leaving the EU has been extremely harmful to the British Pound. Losing more than 20% against most of its major counterparts since the June 2016 Brexit vote, the British Pound is unlikely to recover any significant value so long as the UK is poised to leave the EU.

There is little reason to think that, unless a snap general election is called sometime over the next few weeks, that there is significant scope for recovery for the British Pound. Technical studies of both GBPUSD and GBPJPY suggest that any near-term gains are simply countertrend moves in the context of the broader, multi-year declines.

GBPUSD TECHNICAL ANALYSIS: WEEKLY TIMEFRAME (JUNE 2016 TO AUGUST 2019) (CHART 1)

GBP/USD & GBP/JPY Stem the Bleeding on Latest Brexit News

A look at the weekly timeframe highlights the destruction that Brexit has wrought upon the British Pound. Since Boris Johnson became UK prime minister, the GBPUSD has accumulated losses each week, and the latest turn lower saw GBPUSD breakdown through the March 2017 low at 1.2109. Now, the January 2017 low is in focus at 1.1986, with the post-Brexit vote in October 2016 coming into focus shortly thereafter at 1.1905.

GBP/USD Technical Analysis: Daily Price Chart (August 2018 to August 2019) (Chart 2)

GBP/USD & GBP/JPY Stem the Bleeding on Latest Brexit News

In our GBPUSD technical forecast last week, it was noted that “as is often the case with symmetrical triangle breakdowns, there is a likelihood of a return to the base of the triangle; in this instance, with a bearish break occurring, we’ll be looking for GBPUSD to return to the downside base of the symmetrical triangle, set in October 2016, at 1.1905 over the coming weeks.”

Progress continues to be made with respect to the symmetrical triangle breakdown effort, been with respect to this effort, with GBPUSD falling to a fresh yearly low on Monday, August 12 at 1.2014.

With bearish momentum firm on not only the weekly timeframe but the daily as well – price remains below the daily 8-, 13-, and 21-EMA envelope while both daily MACD and Slow Stochastics trend lower in bearish territory – GBPUSD remains on course for a return to the October 2016 low at 1.1905. Only a close above the daily 8-EMA would throw into question the notion that the path of least resistance remains to the downside for GBPUSD.

IG Client Sentiment Index: GBP/USD Price Forecast (August 13, 2019) (Chart 3)

GBP/USD & GBP/JPY Stem the Bleeding on Latest Brexit News

GBPUSD: Retail trader data shows 76.0% of traders are net-long with the ratio of traders long to short at 3.16 to 1. In fact, traders have remained net-long since May 6 when GBPUSD traded near 1.2993; price has moved 7.2% lower since then. The number of traders net-long is 0.7% lower than yesterday and 5.7% lower from last week, while the number of traders net-short is 1.2% higher than yesterday and 8.1% higher from last week.

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

GBP/JPY Technical Analysis: Daily Price Chart (October 2016 to August 2019) (Chart 4)

GBP/USD & GBP/JPY Stem the Bleeding on Latest Brexit News

After spending most of the past 18-months trading in a downward sloping channel, GBPJPY prices have recently hit terminal velocity, falling through channel support on their way to fresh yearly lows. In context of price action since the October 2016 post-Brexit vote low, there is little meaningful support between current price (128.43) and the post-Brexit vote low at 124.79.

GBP/JPY Technical Analysis: Daily Price Chart (August 2018 to August 2019) (Chart 5)

GBP/USD & GBP/JPY Stem the Bleeding on Latest Brexit News

With the US-China trade war moving back to a state of détente, global equity markets have been buoyed, and in turn, safe haven assets like precious metals, US Treasuries, and the Japanese Yen have all been sold off. As such, it is possible that a morning star candle cluster is forming, evidence of a near-term bottoming effort.

The key aspect of the recent downtrend is that price has been holding below the daily 8-EMA on a closing basis since July 23. As long as GBP/JPY prices are sustaining a move below the daily 8-EMA, and more broadly, the daily 8-, 13-, and 21-EMA envelope, there is no good reason to think that the rally is anything other than a countertrend move. Traders may want to look at opportunities to sell rallies as a result rather than buying the low; a potential turn comes above the daily 21-EMA, which price has not closed above since May 6.

IG Client Sentiment Index: GBP/JPY Price Forecast (August 13, 2019) (Chart 6)

GBP/USD & GBP/JPY Stem the Bleeding on Latest Brexit News

GBPJPY: Retail trader data shows 74.1% of traders are net-long with the ratio of traders long to short at 2.86 to 1. In fact, traders have remained net-long since May 6 when GBPJPY traded near 145.41; price has moved 11.6% lower since then. The number of traders net-long is 7.2% lower than yesterday and 7.5% lower from last week, while the number of traders net-short is 29.8% lower than yesterday and 7.0% lower from last week.

We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests GBPJPY prices may continue to fall. Traders are further net-long than yesterday and last week, and the combination of current sentiment and recent changes gives us a stronger GBPJPY-bearish contrarian trading bias.

FX TRADING RESOURCES

Whether you are a new or experienced trader, DailyFX has multiple resources available to help you: an indicator for monitoring trader sentiment; quarterly trading forecasts; analytical and educational webinars held daily; trading guides to help you improve trading performance, and even one for those who are new to FX trading.

--- Written by Christopher Vecchio, CFA, Senior Currency Strategist

To contact Christopher Vecchio, e-mail at cvecchio@dailyfx.com

Follow him on Twitter at @CVecchioFX

View our long-term forecasts with the DailyFX Trading Guides

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

DISCLOSURES