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  • Writer's pictureMike Paterson

What a difference a day makes as Pound surges on Brexit hopes

Tuesday 12 March 2019

Yesterday saw early selling pressure again for the Pound but with more and more talk/rumours circulating that the EU were offering concessions on the Irish backstop it was a steady climb higher albeit with a few wobbles too. With May finally landing in Strasbourg last night the seemingly positive news saw a further sharp spike in thin liquidity only then to retreat. Plenty of UK economic data out this morning at 09.30 GMT but all eyes on the Attorney General's ruling on the new offer at 11.30 GMT then the vote tonight at 19.00 GMT. Throw US CPI data into the mix at 12.30 GMT and we'll expect a busy day ahead.

GBPUSD had too many moves to highlight each one here but in essence had another retreat toward the 1.2950-60 support that I've been highlighting and where I tweeted that I had taken some shorts back at 1.2965 again. Cue another cap at 1.3020 for a short while but that broke, as did 1.3050, 1.3080 and 1.3100 before stopping at 1.3150. Then news that May was indeed flying to meet Juncker helped lift it again into 1.3200 before once again stopping but on the actual announcement from Strasbourg it was a sharp rally to 1.3291 from 1.3180 in thin conditions only to fall back at test 1.3200.

EURGBP has fallen to post lows of 0.8473 ( GBPEUR up to 1.1805), not seen since May 2017, but been capped around 0.8540 albeit forming a short-term base at 0.8500.

It may sound a little myopic but I remain GBP bearish overall (we're a long way from the finish line and May's deal is simply not good for the UK) and I continue to rally-sell as my preferred strategy  and buy back in the dips (I'm consistent on that one at least) but I continue to see good two-way business with Brexit still casting a very large shadow.

EURUSD has found sellers above 1.1280 but looks underpinned still at these lower levels while USDJPY has also found some decent dip demand again helped by better risk sentiment.USDCHF also remains underpinned and has breached 1.0100 only to fall back capped as EURUSD rallies and EURUSD holds steady.

AUDUSD is still finding support helped by some AUDJPY demand while USDCAD has retreated on firmer oil prices after Saudi Arabia said they were trimming production quotas but tightly bound still. CAD/JPY demand also helping to put a bid into the Canadian%.

Fickle Forex markets ever prevailing so be ready with your entry/exit levels and orders as always.

I'll be around for the Brexit vote later ( sacrificing my Tuesday night football trip!) and will provide an update at some point prior/after.

Fickle Forex markets ever prevailing so do place orders as always, however wish-list.

Have a good day one and all.

Interbank Rate 08.28 GMT

GBPUSD   1.3224

EURUSD   1.1270

EURGBP   0.8520

GBPEUR   1.1732

GBPAUD   1.8705

GBPCAD   1.7731

GBPZAR   18.8461

GBPHKD   10.2526

USDJPY   111.36

USDZAR   14.2700

EURJPY   125.53

GBPJPY   147.33

AUDUSD   0.7071

EURCHF   1.1378

EURHKD   8.7390

USDCAD   1.3403

USDCHF   1.0093

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