Cable rises as Boris Johnson loses his bid for a snap election
The cable rose yesterday after Boris Johnson attempt to call for an election before October 31 flopped. This happened as opposition MPs voted against having an election before October 31. Boris needed two-thirds of the MPs to call for an election. This happened on the same day as the queen signed into law the MPs vote to force Johnson to postpone Brexit for three more months if he is not able to get a deal by October 31. It also came a day after the French foreign affairs minister said the country will veto a request by the UK to extend the exit process. Later today, investors will receive the employment data from the country. The claimant count is expected to have increased by 29.2k in August after increasing by 28k in July. The unemployment rate is expected to have remained unchanged at 3.9% while the earnings index plus bonus is expected to have remained unchanged at 3.7%.
The price of crude oil rose sharply after the new Saudi Arabian energy minister vowed to continue with his predecessor’s strategy of supply cuts. This came two days after Saudi Arabia’s prince Mohammed removed Khalid al-Falih from the energy ministry. According to the Financial Times, this decision was attributed to Falih’s decision not to prioritize the IPO of Saudi Aramco, the most profitable company in the world. This year, the Saudi energy ministry has been trying to raise oil prices after they crashed late last year. Still, the prices have struggled to reach last year’s highs.
Wall Street rose yesterday for the fourth consecutive day as investors looked ahead to the upcoming trade talks between the United States and China. The talks are scheduled to take place early next month and analysts believe that there is a sense of urgency as the two economies slow. A recent report by New York Times said that Trump was privately worried that the country’s economy was weakening. Meanwhile, data released from China on Sunday showed that the country’s exports had declined sharply in August, which is a sign that the Chinese also want a deal.
The EUR/USD pair has been in a holding pattern for the past few days as it trades within a relatively narrow range. The pair is now trading at 1.1042. On the 30-minute chart, the price is slightly below the 14-day and 28-day moving averages. The price is between the 1.1015 and 1.1068 channel, which has formed in the past few days. Meanwhile, the RSI has been declining and is currently trading at 43. At this stage, the pair could break-out in either direction. This will likely happen on Thursday when the ECB delivers its interest rates decision.
The GBP/USD pair rose to a high of 1.2385 in the American session. The pair then eased in the Asian session and is currently trading at 1.2340. The hourly chart shows how the pair has soared in the past few days from a low of 1.1958. This price is along the middle line of the Bollinger Bands while the accumulation/distribution indicator has continued to rise. The Bulls Power indicator has eased a bit. While the pair could continue moving higher, there is also a likelihood of more volatility as the Brexit situation continues.
The XBR/USD pair rose sharply after the new Saudi energy minister pledged to continue slashing oil production. The pair rose to a high of 62.58, which is along the upper line of the Bollinger Bands. The price is also at the highest level since August 7. The RSI has reached the overbought level of 70. The pair will likely ease slightly today before continuing the current upward trend.