Sterling jumps as Boris Johnson suffers blow from Supreme Court
The sterling rose after the UK supreme court unanimously ruled that Boris Johnson decision to suspend parliament was unconstitutional. In a statement shortly afterward, the speaker said that parliament should meet without delay. The decision also led to calls for the prime minister, Boris Johnson to resign. In a statement, Plaid Cymru, of the Welsh nationalist party said that Johnson should resign and that a no-deal Brexit should be stopped once and for all. The same sentiment was repeated by other leaders, including Jeremy Corbyn and Joanna Cherry of the SNP. The decision to reopen parliament will likely have no major impact because parliament has already voted to stop a no-deal Brexit.
US futures rose after Steve Mnuchin reiterated that talks between the US and China will restart in October. This came a few days after Chinese officials blindsided the US members by cutting short a planned trip to the farming regions. In addition, Chinese importers said that they would buy about 10 boatloads of US soybeans from October to December. China hopes that this goodwill message will help it to seal a wider trade agreement with the US. In recent weeks, data from China has shown that the economy is still struggling, with the manufacturing sector being the most affected. Later today, traders will receive consumer confidence data from the US. This data is expected to show that consumer confidence declined from 135.1 to 134.1.
The euro declined slightly against the USD even after some positive data from Germany. According to a survey by IFO, the business climate index rose to 94.6 in September from last month’s 94.3. The current assessment rose to 98.5 from the previous 97.4. On the negative side, the business expectations for September declined to 90.8 from the previous 91.3. Meanwhile, in Japan, the country’s manufacturing PMI declined to a 7-month low of 48.9.
The EUR/USD pair declined slightly to a low of 1.0990. The pair is now trading at 1.0990, which is along the 23.6% Fibonacci Retracement level on the 30-minute chart. This price is also along the 14-day and 28-day moving averages. The pair is also forming a wedge as shown below. There is a likelihood that it will break out in either direction.
The GBP/USD pair rose today after the UK supreme court ruled against Boris Johnson. The pair rose to a high of 1.2488 and then pared some of those gains. As of writing, the pair is trading at 1.2445. On the four-hour chart, this price is between the lower and middle lines of the Bollinger Bands. The RSI has dropped from the overbought level of 75 to the current 50. The pair could continue moving higher, to test the upper line of the Bollinger Bands at 1.2555.
The USD/CHF pair dropped below the important support shown in blue below. The pair is now trading at 0.9888, which is lower than the monthly high of 0.9890. On the four-hour chart below, this price is slightly lower than the 14-day and 28-day moving averages, while the RSI has been relatively unchanged. The pair could continue moving lower to test the important support of 0.9950.