Dollar Higher, Sterling Sold Off on BREXIT Day
Sterling is sold off deeper as the Brexit Day finally comes. UK Prime Minister is scheduled to trigger Article 50 today, nine months after the historical Brexit referendum last year. However, at the moment, there is no fresh news regarding Brexit and all should already be priced in the markets. Hence, while the pound stays bearish against Dollar, there is no fresh evidence of bearishness against the others yet. Take GBP/AUD as an example, it's the worst performing pair for the week so far. The pull back from 1.6568 is deep and steep. But at this point, there no change in the overall outlook. The choppy fall from 1.7204 is seen as a corrective move and could be finished at 1.5905 already. Another rise is in favor to extend the pattern from 1.5665 low. And above 1.6568 will target 1.7204 and possibly further to 38.2% retracement of 2.0534 to 1.5665 at 1.7525. This will remain the preferred case as long as 1.5905 support holds.
BP/USD's sharp decline and strong break of 1.2468 minor support suggests that rebound from 1.2108 is completed at 1.2614 already. Intraday bias is turned back to the downside for 1.2108 support next. Overall, price actions from 1.1946 are viewed as a consolidation pattern. Break of 1.2108 support will be the first sign of larger down trend resumption and would target 1.1946 low for confirmation. On the upside, above 1.2614 will bring another rise. In that case, we'd expect upside to be limited by 1.2705/2774 to bring down trend resumption eventually. In the bigger picture, fall from 1.7190 is seen as part of the down trend from 2.1161. There is no sign of medium term reversal yet. Sustained trading below 61.8% projection of 2.1161 to 1.3503 from 1.7190 at 1.2457 will target 100% projection at 0.9532. Overall, break of 1.3444 resistance is needed to confirm medium term bottoming. Otherwise, outlook will remain bearish.
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***Information contained in this news letter are gathered from third parties and should not be regarded in any way as trade advice or recommendations by CM Trading. CM Trading does not recommend or advise traders or investors in their decision making, but merely provides information from the market for its clients as additional information being made available as per the events occurring in the financial markets.
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