The British pound tumbles over Brexit worst case scenario

Pound volatility

The British pound fell to a twenty-seven month trading low against the US dollar this week, over growing fears of a hard-Brexit  occurring on October 31st this year. The GBPUSD pair tumbled below the 1.2400 level, after the leading candidate to replace Theresa May as Conservative party leader, Boris Johson, admitted that the Irish backstop issue could not be resolved with the EU. The British pound also fell to a six-month trading low against the euro this week. Sterling made a strong recovery in late week trading, after monthly UK retail sales data came out much better than expected and FED member William’s hinted at a 50 basis points US rate cut.

• The GBPUSD pair is only bearish while trading below the 1.2480 level, key support is found at the 1.2410 and 1.2380 levels.
•  If the GBPUSD pair trades above the 1.2530 level, buyers may test towards the 1.2660 and 1.2770 resistance levels.

Lower euro

The euro currency suffered losses against the US dollar this week, due to worse than expected German economic data and a possible lowering of inflation expectations from the European Central Bank. German ZEW survey data surprised to the downside, while the ECB were reported to be adjusting policy language in order to lower the central banks inflation expectations. The ECB have a mandate to keep eurozone inflation around the two percent threshold, any dovish tweeking of policy language from the central bank is seen as bearish for euroarea growth.

• The EURUSD pair is only bullish while trading above the 1.1248 level, key resistance is found at the 1.1310 and 1.1365  levels.
• If the EURUSD pair trades below the 1.1248 level, sellers may test towards the 1.1200 and 1.1168 support levels.

Bitcoin declines

Bitcoin continued its recent reversal, with the number one cryptocurrency slipping back towards the $9,000 support level this week. The move lower was triggered by bearish remarks from US lawmakers, who raised serious concerns about Bitcoin and Facebook’s new cryptocurrency Libra. Other cryptocurrencies also suffered heavy losses this week, with Ethereum crashing below the key $200.00 support level. Litecoin also moved back towards its key 200-day moving average, before staging a recovery back above the psychological $100.00 resistance level.

• The BTCUSD pair is only bullish while trading above the $11,000 level, key resistance is found at the $11,400 and $12,000 levels.
• If the BTCUSD pair trades below the $11,000 level, key support is located at the $9,100 and $8,000 levels.

Aussie advances

The Australian Dollar held firm above the 0.7000 level this week, despite weaker than expected Chinese data and mixed jobs data from the Australian economy. Official GDP data from the Chinese economy for the second quarter of 2019 slumped to a twenty-seven year low this week. The AUDUSD pair also looked past much weaker than expected monthly jobs data this weaker, which missed expectations by a margin of 8,500 jobs. The official Australian unemployment rate also held steady this week, at 5.2 percent, boosting the AUD/USD pair as the rate had started to creep higher over the first and second quarter of this year.

• The AUDUSD pair is only bullish while trading above the 0.6985 level, key resistance is found at the 0.7070 and 0.7120 levels.
• If the AUDUSD pair trades below the 0.6985 level, key support is located at the 0.6965 and 0.6930 levels.