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Upbeat Brexit News Pushed Pound Higher

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Dear Traders,

Monday’s best performer was the British pound which received a boost from U.K. Prime Minister Theresa May who announced that they are close to an agreement on a Brexit transition. The upbeat news pushed the pound to a high of 1.3877 against the dollar. We now expect the pound to test the 1.39-level before potential pullbacks occur. As long as GBP/USD trades above 1.38, chances are in favor of the bulls.

Unlike the cable, there was little movement in the EUR/USD with the euro trading resiliently above 1.23. The Italian election did not result in a clear majority but market participants took a hung parliament as a more favorable outcome than having the Eurosceptic Five Star Movement hold a majority. We still wait for a clear break above 1.2370, and furthermore, a sustained break of 1.24 in order to anticipate further bullish momentum.

There are no major economic reports scheduled for release today, so the price action will hinge on investors’ risk appetite for euros and pounds.

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EUR/USD Remains Below 1.18, GBP/USD Faces 1.33

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Dear Traders,

The euro ended the trading day virtually unchanged against the U.S. dollar after a bullish reversal towards 1.18 has proved short-lived. We now expect the EUR/USD to trade lower towards 1.1680 unless we see a sustained break above 1.18 and farther 1.1840, which would shift the bias in favor of the bulls.

The GBP/USD followed its short-term upward trend channel (see yesterday’s analysis) and rose to a high of 1.3280. If the cable is able to hold above 1.32 we expect further gains towards 1.3310 and possibly even 1.3325. But irrespective of the technical outlook, any new Brexit headlines or speculation about the Brexit progress will affect the cable’s price action in the near-term.

Sterling traders should keep an eye on the Bank of England testimony at 10:00 UTC. Several BoE officials are scheduled to testify before Parliament and if there are indications of further monetary policy normalization in 2018, the pound could soar.

Federal Reserve Chair Janet Yellen is scheduled to speak later today at 23:00 UTC but her comments may have little impact on the greenback’s price action as she announced her retirement from the Fed in February after Jerome Powell has been sworn into office.

Daily Forex signals:

Additional daily and long-term entries are available for subscribers.

View our daily signal alerts https://www.maimar.co/category/daily-signals/

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We wish you good trades and many pips!

Any and all liability of the author is excluded.

Copyright © All Rights Reserved 2017 Maimar-FX.

www.maimar.co