It was a choppy first quarter for the Brexit saga now the Brexit theme likely to switch to the invisible mode for the time being as Brexit day is delayed again to 31 October. However, there is an option to leave sooner if the UK withdraw agreement is approved.
“This is longer than the 30 June delay UK PM May had hoped for and will mean the UK will have to take part in European Parliament elections on 23 May, if they have not found an agreement by then,” Westpac said.
Danske Bank comes up with three options on Brexit end game. “May’s deal as it is (if the DUP and Brexiteers get so afraid of the extension that they eventually back the deal), May’s deal including a permanent customs union (if cross-party talks with Labour succeed, with the risk of splitting the parties) or a second EU referendum (a small majority is now in favor of remaining in the EU, although it is only very slim and uncertainty is high).”.
Turning to the recent set of data releases, ONS reported that UK GDP grew by 0.2% in February. Monthly GDP growth was 0.2% in February 2019, after contracting by 0.3% in December 2018 and growing by 0.5% in January 2019.
In the UK, jobs data, CPI and retail sales data to keep GBP traders busy.
UBS said “Although the Brexit deadline has been extended, the cloud of uncertainty that has been weighing on the UK economy is unlikely to lift. Growth data for the first quarter has been better than expected, but part of this surge in activity can be attributed to preparing for Brexit (stockpiling)”.
The euro cross has ended overnight on a flat note, with the price closing above 20MA but failing to handle 50MA. The price action sentiment is remaining impulse higher but still on a narrow range of 0.8730-0.8470 levels.
The cross is approaching interesting resistance at 0.8650-0.8675. Breaking above the level would increase the chances of the continuing trend higher towards 0.8700-0.8730. In an extreme case 0.8800 even possible, but it’s too early to forecast.
The flip side, support finds at 0.8590 below here 0.8550, and 0.8500 exists. The daily RSI and oscillator are remaining bullish. Moreover, the weekly oscillator has been turned bullish crossover.
It is important to always keep in mind the risks involved in trading with leveraged instruments.
What is your Technical View?
Do you have a different idea? Please leave us a comment and get an answer from our professional analysts.