BRITISH POUND SOARS OVER NEW FOUND BREXIT OPTIMISM
The British pound soared against the US dollar and the euro currency this week after chief EU negotiator Michel Barnier offered the strongest clue yet that the EU was about to offer the UK a favourable Brexit deal. Speaking in Brussels, Michel Barnier offered an olive branch to the United Kingdom, saying that the EU was set to offer the UK ‘a deal like no other’. The GBPUSD pair surged on the news, breaking above the 1.3000 level, while the EUR/GBP pair fell from a thirteen-month trading high, moving back below the 0.9000 level.
The GBPUSD pair is bullish while trading above the 1.2930 level, further upside towards the 1.3080 and 1.3150 levels seem possible.
If the GBPUSD pair moves below the 1.2930 level, further downside towards the 1.2850 and 1.2775 levels seem possible.
Bitcoin briefly recovered above the $7,000 level, after spending most of August consolidating in a narrow trading range. The world’s number one cryptocurrency by market capitalization found resistance just before the $7,100 level before eventually turning lower. Despite the move higher, the BTC/USD pair is still set for a ten percent monthly decline in August. Ethereum remained one of the worst performing cryptocurrency this week, with the second largest cryptocurrency consolidating between the $250.00 and $290.00 levels.
The BTCUSD pair is only bullish while trading above the $7,100 level, further upside towards the $7,500 and $7,800 levels seem possible.
If the BTCUSD pair trades below the $7,100 level, further losses towards the $6,800 and $6,500 support levels remains possible.
The Canadian dollar climbed to its best trading level against the U.S. dollar since early June this week, as optimism grew over a NAFTA deal between the United States and Canada. The Trump administration had announced the successful renegotiation of the North Atlantic Free Trade Agreement with Mexico, boosting the Mexico peso currency and market expectations for US and Canadia trade talks. The USDCAD pair fell on the news, dropping towards the 1.2900 level as investors expected that the Trump and Trudeau administrations would also find common ground over NAFTA.
The USDCAD pair remains bearish while trading below the 1.2990 level, further downside towards 1.2880 and 1.2840 levels seems possible.
If the USDCAD pair moves above the 1.3000 level, further upside towards the 1.3123 and 1.3220 resistance levels remains possible.
Emerging markets came back into focus again this week, with a number of emerging market currencies falling to all-time trading lows against the US dollar. The Turkish lira weakened further against the US dollar, as investors continued to lose confidence in the Turkish economy and President Erdogan’s fiscal policies. The Argentine peso fell to its lowest level ever against the U.S. dollar, with the USDARG pair rising above the $34.00 level, as Argentina’s President asked the IMF to speed-up its proposed $50 billion aid deal to Argentina. The Indian Rupee also fell to its lowest level ever against the greenback, as rising oil price and spiralling inflation continued to spook investors.
The USDJPY pair is bearish while trading below the 111.10 level, key support is found at the 110.55 and 110.00 levels.
If the USDJPY pair trades above the 111.10 level, further upside towards the 111.39 and 111.80 levels remains possible.