The pound witness pressure as traders remains side-lines due to the Brexit deal concerns. The euro cross will move in a range before breaking down before UK Parliamentary vote & Debate on Draft Brexit Agreement in December.
“After a difficult endgame, reflecting the challenge of forging a consensus in the divided UK on relations with Europe, we expect a decision in 1Q19 for a soft Brexit, likely along the lines of the current withdrawal treaty. The detailed trade talks will start in summer 2019. We expect a longer transition period, likely to 2022, to reduce the focus on Brexit for a while.” Morgan Stanley reported in a note to clients.
It’s a quiet week regarding microdata risk; focus remains on the Brexit deal headlines. Pound traders focus on the specific date for the parliamentary vote.
A date has yet to be officially confirmed, but the latest reports suggest it could take place on 12 December, before the meeting of the European Council on 13/14 December, according to Credit Agricole FX Strategist Jennifer Hau reported in a note.
FX: After failure against the October high 0.8940, the euro cross has started to consolidate in a narrow range between 0.8820-0.8940.
On the downside, the break below 0.8800 its 20MA which coincides with 100MA (weekly) affects the near term range bias and paves the way to 0.8750 and 0.8730 levels.
The flip side, keep an eye on the resistance around 0.8940, as a breakout above these levels would strengthen the upward bias with a new target 0.8970 and 0.9000 initially.
It is important to always keep in mind the risks involved in trading with leveraged instruments.
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