News
- Reports emerged that UK PM has abandoned cross-party talks as they would fracture the Conservative party even more. Observers expect Mrs May’s Plan B for Brexit to involve persuading the EU to change its mind on the Irish backstop. Separately, a group of lawmakers are preparing amendments to force Mrs May to renegotiate or delay Brexit altogether. The latter move would add to the already high cost of Brexit as companies and government agencies would have to reset their Brexit preparations again.
- U.S. President Donald Trump made an attempt to end the government shutdown over the weekend by offering limited legal protection to DREAMers (undocumented migrants who entered the U.S. as children impacted by the DACA and DREAM Acts) in exchange for the $5.7bn funding for the U.S.-Mexico border wall. The offer was rejected by Democrats before Trump made his official remarks outlining the offer.
The focus of attention
- UK PM Theresa May is expected to outline her next steps with regards to Brexit today. Traders are also waiting on China’s latest GDP numbers as well as Germany’s producer inflation reading.
Expected events. All times GMT.
- 02:00 China will release its Q4 GDP.
- 07:00 Germany will release its December PPI.
Technical Analysis
- The major trend remains bearish as EUR USD remains well below the 50-SMA and 200-SMA. On the granular 30-minute view a rising wedge was formed but is just starting to breakdown and at the moment is trying to establish 1.1362 as a support level. Breaking this support would be a bearish development near-term.
- GBP USD peaked at 1.3000 the previous week and has since turned bearish sliding all the way to the 1.2848 level. The pair is now consolidating with support at 1.2855 but has shown little signs of making a move in either direction despite having just climbed above its 50SMA.