Sterling gained slightly against the Dollar on Monday after British Prime Minister Theresa May unveiled her Brexit ‘plan B’ to Parliament.
The Pound’s positive reaction to May’s speech came as a surprise, especially when considering how MP’s described the ‘plan B’ as ‘Plan A’ in disguise. With the Prime Minister once again rejecting calls for a second referendum and refusing to rule out leaving the EU without a deal in place, nothing much has changed from ‘Plan A’. Although vows were made to find solutions to the Irish border, this clearly fell on deaf ears as nothing new was brought to the table. With May scheduled to debate her deal in Parliament on January 29, the Pound is likely to become more volatile and highly reactive to Brexit headlines. All in all, it seems markets are discounting the probability of a no deal Brexit despite May’s speech and this continues to be reflected in the Pound’s price action. Heightened expectations over the extension of Article 50 may offer Sterling support in the short term. However, the medium to longer term outlook remains clouded by Brexit uncertainty.
In regards to the technical picture, the GBPUSD is journeying within a wide range on the daily charts with support at 1.2700 and resistance at 1.2920. A breakout back above 1.2920 is seen opening a path back towards 1.3000.
Yuan weakens into trading week
The Chinese Yuan entered the trading week under noticeable selling pressure as geopolitical risks reduced appetite for emerging market currencies.
Brexit related uncertainty, ongoing US-China trade developments and a prolonged partial government shutdown in the United States left investors cautious. With concerns over plateauing global economic growth adding to the cocktail of themes draining risk sentiment, emerging market currencies remain an easy target for bears.
Technical traders will continue to closely observe how the USDCNY behaves around the 6.800 regions. A daily close above this point may signal a move higher towards 6.809.
Commodity spotlight – Gold
A stabilizing Dollar sent Gold sinking with prices trading around $1278.50 as of writing.
Although bears seem to be in control in the short term, the outlook for the precious metal still points to further upside. With concerns over slowing global growth, Brexit uncertainty and political risk in Washington weighing on sentiment, Gold remains heavily supported in the medium to longer term.
Technical traders will continue to closely observe how the metal behaves above the $1272 level. A rebound back towards $1290 will be on the cards if this level proves to be reliable support. On the other hand, a breakdown below this level is seen opening a path towards the $1260 regions.
دست برداری: اس آرٹیکل کا مواد ذاتی آراء پر مبنی ہے اور اسے ذاتی اور/یا کسی اور سرمایہ کاری کا مشورہ اور/یا پیش کش اور/یا فنانشیل آلات میں کسی بھی قسم کی لین دین کرنے کی ترغیب اور/یا ضمانت اور/یا مستقبل کی پرفارمنس کی پیش گوئی سمجھ لینا درست نہیں۔ ForexTime (FXTM)، اس کے ملحقین، ایجنٹس، منتظم، افسران یا ملازمین کسی بھی معلومات یا دستیاب ڈیٹا کی درستگی، استحکام، موزونیت یا جامعیت کی ضمانت نہیں لیتے اور نہ ہی اس حوالے سے کی گئی کسی سرمایہ کاری کے نتیجے میں ہونے والے ممکنہ نقصانات کے لیے ذمہ دار ٹھہرائے جا سکتے ہیں۔