Sterling advances towards 1.3000 level as Brexit drama unfolds

Brexit drama

The British pound traded towards multi-month highs against the US dollar this week, as financial market participants anticipated that UK and EU negotiators would strike a deal before the October 31st deadline. The GBPUSD pair soared to its highest trading level since May 2019, as optimism grew that a Brexit deal would be struck. After intense negotiations, an amended Brexit proposal was eventually agreed upon,  boosting optimism that a hard-Brexit could be avoided. The deal now depends upon a vote from UK lawmakers inside the House of Parliament this Saturday.

• The GBPUSD pair is only bearish while trading below the 1.2660 level, key support is found at the 1.2550 and 1.2470 levels.
• If the GBPUSD pair trades above the 1.2660 level, buyers may test towards the 1.2900 and 1.3000 resistance levels.

IMF warning

Optimism towards the recently announced phase one Sino-US trade agreement started to fade this week as trade tariffs still remain in place from both sides. The International Monetary Fund also offered a dire warning to investors that a global recession may be on the horizon if the trade dispute is not fully resolved. The IMF downgraded global growth and noted that a financial crisis similar to 2008 could be on the horizon if a trade truce between the US and China was not reached. US President Donald Trump announced that phase one of a Sino-US trade deal was being written this week.

• The USDJPY pair is only bullish while trading above the 107.90 level, key resistance is found at the 109.30 and 110.00 levels.
• The USDJPY pair is only bearish while trading below the 107.90 level, key support is located at the 107.40 and 106.90 levels.

Crypto volume

The broader cryptocurrency market eroded its monthly gains this week, as a lack of trading volumes and bearish fundamental news pushed the value of digital assets lower. The recently launched Bakkt futures trading platform suffered a decline in the amount of Bitcoin contracts traded this week, sending the BTCUSD pair below the $8,000 level. Expectations had been high that the Bakkt futures trading platform would help to generate greater Bitcoin adoption and trading participation. The BTCUSD pair spent its third-straight week below its key 200-day moving average.

• The BTCUSD pair is only bearish while trading below the $8,800 level, key support is found at the $7,500 and $7,100 levels.
• If the BTCUSD pair trades above the $8,800 level, buyers may test towards the $9,100 and $9,300 resistance levels.

RBA minutes

The Australian dollar moved sharply lower against the US dollar in early week trading, after the Reserve Bank of Australia Meeting Minutes saw the central bank striking a dovish tone. Bearish remarks inside the Meeting Minutes caught traders and investors off-guard, sending the AUDUSD pair back towards the 0.6700 level. The RBA statement noted that more interest rate cuts may be warranted if the inflation and unemployment situation in Australia worsens. The Australian economy released solid monthly unemployment and jobs figures later in the week, which helped the AUDUSD pair recover earlier losses.

• The AUDUSD pair is only bullish while trading above the 0.6790 level, key resistance is found at the 0.6880 and 0.6915 levels.
• If the AUDUSD pair trades below the 0.6790 level, key support is located at the 0.6710 and 0.6660 levels.