Forex Signals Brief for Oct 21: Brexit to Dominate Sentiment
Rowan Crosby • 2 min read
All last week the focus was without a doubt on the Brexit. While a deal was stuck we ran into the same situation whereby the UK Parliament just can’t agree on anything.
That has already seen the GBP/USD open the week lower and time will tell if that negativity spreads through Europe and the US.
Markets were upbeat on the back of the US-China min-deal and some positive economic data until the weekend Brexit vote. PM Johnson still believes he can get something done by month’s end, so that will be the new rolling target for all those in the UK and EU.
There are a few key data points that we will be looking for this week, with the main focus also coming out of Europe.
We have the monthly ECB meeting and that might be one to watch for further signs of monetary policy changes to attempt to stimulate the economy and clearly the EUR/USD will be in focus. While no change in rates is expected, it will again be what Draghi has to say that could be of most interest to markets.
Data is thin to start the week, so all of the focus today, will be on that Brexit fallout and whether or not the Pound can hold up throughout the Euro session.
Forex Signal Update
The FX Leaders Team had a strong week with 11 wins from 16 signals for a solid 69% win rate.
GBP/USD – Pending Signal
The GBP/USD will really be in focus today. We can see that the key levels have really been holding strong, with 1.3000 and 1.2800 proving to be key support and resistance. However, today we might look for any opportunities to go with the momentum, given the weekend’s developments.
GBP/JPY – Pending Signal
The GBP/JPY also has the potential for some good trending action today. With the safe-haven aspect of the JPY in contrast to any ‘risk-off’ sentiment in the GBP, this could be a good pair to trade for a good risk/reward opportunity.
BTC has staged somewhat of a recovery and we have seen a sharp move higher away from the $8,000 level.
In reality, we are still really just seeing the range continue here with the $8,500-600 resistance level above and the $7,800 as strong support.
With thin trade this time of the week, I wouldn’t read too much into the spike here that has seen price recover somewhat. We will really need a break of either of those levels mentioned to get any momentum away from the current range.