Sterling jumps on Boris Johnson manifesto
Sterling rose as the market reacted to Boris Johnson’s manifesto that was launched on Sunday. In the manifesto, Johnson said that he would hire about 50,000 nurses and have no tax hike. He also pledged to get Brexit done by Christmas and to have major trade deals with the United States, Australia, New Zealand and Japan within three years. These policies would help the UK at a time when it is going through a slowdown. On Friday, data from Markit showed that activities in the service sector declined to a three-year low.
Asian stocks rose as the market focused on trade and the Hong Kong election. Hang Seng rose by 1.5% as pro-democracy candidates surged to a landslide victory as voter turnout increased. This election came after the region has seen a wave of protests in the past five months. The protests started when the pro-Beijing government announced a new policy that allowed extradition to mainland China. Meanwhile, the market cheered positive signs on trade. Over the weekend, Donald Trump said that he hoped that a deal would be made by the end of the year. Dow and S&P500 futures rose by 75 and 8-points respectively.
The economic calendar will be light today as there will be no major economic data. The markets will receive German survey data from IFO. The business expectations are expected to increase from 91.5 to 92.5 while the current assessment will increase from 97.8 to 97.9. The Ifo business climate will increase from 94.6 to 95.0. Meanwhile, the market will receive corporate earnings data from the likes of Spire, Ambarella, Nutanix, PVH. HPE, and The Children’s Place.
The EUR/USD pair declined sharply on Friday to a low of 1.1013. This was the lowest level since November 15. The pair remained in this range today and is trading at 1.1020. The pair is trading below the 14-day and 28-day exponential moving average. The RSI has moved to slightly above the oversold level. The momentum indicator has remained below 100. The pair may continue moving lower to test the important support of 1.1000.
The GBP/USD pair rose today in reaction to Boris Johnson’s manifesto. The pair reached a high of 1.2855, which is along the 61.8% Fibonacci Retracement level. The pair is trading below the 14-day and 28-day moving averages while the RSI has moved to almost 40. The Average True Range (ATR) has been dropping. The pair may give up these gains and test the 1.2800 support.
The USD/JPY pair rose during the Asian session. The pair reached a high of 108.80, which is higher than last week’s low of 108.27. On the hourly chart, the price is above the 14-day and 28-day moving averages. The RSI has moved higher to almost the overbought level. The momentum indicator has moved slightly lower. The pair may continue to move higher, to test the important resistance level of 109.