British pound retreats as odds of no-deal Brexit rise
The British pound slumped against most peers as odds of a no-deal Brexit increased. The currency fell after the Sun reported that Boris Johnson was prepared to walk away from the deal if the EU failed to make the necessary concessions. The report came as the two sides met to resolve key outstanding issues about fisheries and fair competition laws. In a separate report, the Times said that Angela Merkel and Emmanuel Macron had also made a final offer in their bid to have a deal. Meanwhile, Micheál Martin, the Irish Prime Minister who has talked to both sides said that there was a 50-50 chance that the two sides will reach a deal.
The Australian dollar dropped sharply even after relatively strong economic data from Australia and China. In a report earlier today, the Australian Industry Group (AIG) said that the services index rose from 51.4 in October to 52.9 in November. Similarly, a report by ANZ said that the country’s job advertisements increased by 13.9% in November from the previous 11.9%. The most notable numbers came from China where the statistics office released impressive trade numbers. In total, the country’s exports increased by 21.1% while imports rose by 4.5% leading to a record trade surplus of more than $75 billion.
The price of crude oil dropped today as traders reflected on last week’s deal by OPEC and its allies. In a statement last week, the members agreed to increase production by 500,000 barrels per day. That was a compromise between countries like Russia and Saudi Arabia that wanted to leave supplies at the current level. Other countries led by UAE wanted to significantly boost production. The price is also reacting to the rising number of active oil rigs in the United States. In a report on Friday, Baker Hughes said that total rigs in the US rose to 246 from the previous 241.
The GBP/USD pair declined to an intraday low of 1.2078 and then bounced back to the current 1.2110. On the four-hour chart, the price is between the 14-day and 28-day exponential moving averages. It is also slightly below the intraday high of 1.2177. At the same time, the Relative Strength Index (RSI) has moved from the overbought level of 80 to the current 53. Therefore, after the recent upward trend, there is a possibility that the pair will continue with the current pullback.
The GBP/USD fell sharply today as traders reacted to the latest developments on Brexit. It is trading at 1.3272, which is slightly above the intraday low of 1.3220. The price managed to move below the ascending trendline that is shown in yellow. The 14-day and 28-day EMAs are also making a bearish reversal pattern. Therefore, there is a possibility that the pair will continue falling as bears attempt to move below 1.3200.
The AUD/USD pair declined to an intraday low of 0.7372. This price is substantially lower than last week’s high of 0.7450. On the hourly chart, the price has also moved below the short and medium-term moving averages while the Average Directional Index (ADX) has jumped to 52. Therefore, it seems like bears are prevailing, meaning that the pair could continue falling to 0.7350.