BRITISH POUND ROCKED OVER UK POLITICAL UNCERTAINTY
The British pound plunged to its lowest trading level against the US dollar since April 2017 this week, as British Prime Minister Theresa May faced a leadership challenge from within the ruling Conservative party. The GBPUSD pair tumbled below the 1.2500 level, as British PM faced a vote of no-confidence over her current leadership, following the unexpected cancellation of her Meaningful Brexit vote in UK Parliament. British PM Theresa May eventually found the backing needed from within the Conservative party and went on to survive the vote of no-confidence, sparking a temporary relief rally in the British pound against most major currencies.
The GBPUSD pair is strongly bearish while trading below the 1.2657 level, key support is found at the 1.2480 and 1.2400 levels.
If the GBPUSD pair trades above the 1.2800 level, key resistance is then found at the 1.2930 and 1.3100 levels.
Litecoin fell to a fresh 2018 trading low this week, with the LTCUSD pair reaching levels not seen since May 2017. Litecoin edged closer to the $20.00 support level, as the ninth largest cryptocurrency by market capitalization slumped to a fresh December trading low, hitting $21.32. Litecoin had started the year trading around the $250.00 level, which means that the latest decline in the LTCUSD pair has seen the popular crypto lose close to ninety per cent of its market capitalization since January 2018.
The LTCUSD pair remains bearish while trading below the $40.00 level key support is found at the $20.00 and $15.00 levels.
If the LTCUSD pair trades above the $40.00 level, buyers could test towards the $55.00 and $66.00 levels.
ECB ON HOLD
The European Central Bank kept interest on-hold this week as widely expected and announced the end of Quantitative Easing at the end of the year. Despite the announcing the end of the central bank’s QE programme, the current ECB President, Mario Draghi, struck an overall dovish tone at the policy meeting, as he acknowledged that the balance of risk to the eurozone economy was now to the downside. The European Central Bank President also expected weaker inflation and economic growth in 2019, causing the euro currency to move lower against the US dollar.
The EURUSD pair is bearish while trading below the 1.1430 level, further losses towards the 1.1300 and 1.1216 levels remains possible.
If the EURUSD pair trades above the 1.1400 level, further gains towards the 1.1500 and 1.1630 resistance levels then seems possible.
SWISS FRANC OVERVALUED
The Swiss National Bank kept interest rates unchanged at -0.75 per cent this week as widely expected, with the central bank striking a dovish tone towards future rate hikes and inflation. The SNB downgraded inflation forecast for 2019 and 2020, whilst also noting that global downside risks have increased. The SNB also reiterated that the Swiss franc currency remains overvalued and pledged that the central bank will remain active in the foreign exchange market.
The USDCHF pair is bearish while trading below the 0.9910 level, further losses towards the 0.9840 and 0.9780 levels remains possible.
If the USDCHF pair trades above the 0.9980 level, further gains towards the 1.0055 and 1.0100 resistance levels then seems possible.