Market News & Analysis

Top Story

Soft Brexit for sale

Sterling’s ‘sell-the-news’ pullback remains tidy with no remarkable volatility.

Brexit fatigue

Still, as the pound hovers near $1.32 from as high as $1.3350 a day ago, the question of whether underlying sentiment is as positive as once appeared arises. Indeed, part of the rationale for lightening up is that a delayed Brexit wouldn't remove longer-term economic uncertainties. A chilling rise in job cuts was a key takeaway from factory data out earlier. Nor would an extension of the Article 50 period guarantee to resolve the backstop impasse. EU “Brexit fatigue” (to quote EU Commission President Jean-Claude Juncker) could even limit any delay Brussels is willing to grant. Either way, there have been no significant developments since Parliament voted to hold Theresa May to her word this week. And with no top-level discussions planned between now and mid-March votes and a 21st-22nd March EU Summit, talk will help fill the vacuum. See Friday’s Times report that Ireland’s DUP signals a new openness to compromise; not for the first time. Unsourced reports are likely to be front and centre for now.

Meanwhile, the near-term technical focus for sterling against the dollar is $1.3217, a support confirmed by multiple bounces on Friday, the inverse of its January role as resistance. Heavy intraday and daily oscillators (like RSI) put some welly behind the down move since Wednesday. At $1.3222 (last check) momentum sellers seem in control. Moving below key support would add conviction and a likely eye, initially, on hourly lows from earlier this week between $1.3264/80.

Price chart: sterling/U.S. dollar – hourly [01/03/2019 16:48:15]


Source: Refinitiv/City Index


From time to time, GAIN Capital Australia Pty Ltd (“we”, “our”) website may contain links to other sites and/or resources provided by third parties. These links and/or resources are provided for your information only and we have no control over the contents of those materials, and in no way endorse their content. Any analysis, opinion, commentary or research-based material on our website is for information and educational purposes only and is not, in any circumstances, intended to be an offer, recommendation or solicitation to buy or sell. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. No representation or warranty is made, express or implied, that the materials on our website are complete or accurate. We are not under any obligation to update any such material.

As such, we (and/or our associated companies) will not be responsible or liable for any loss or damage incurred by you or any third party arising out of, or in connection with, any use of the information on our website (other than with regards to any duty or liability that we are unable to limit or exclude by law or under the applicable regulatory system) and any such liability is hereby expressly disclaimed.