Forex Daily Recap – Cable Woes over EU’s Updated Financial Market Access Post Brexit

GBP/USD

The Sterling Pound pair lost ground today, dropping beneath the sturdy 1.2373 support handle. This slump in the Cable came following the release of EU’s report suggesting a restriction on their financial market access post-Brexit. The EU Officials made it evident that any member outside the bloc won’t have access for foreign banks, insurers, and investment firms.

“It should be noted that equivalence empowerments do not confer a right on third countries … to receive an equivalence determination, even if those third countries are able to demonstrate that their framework fulfils the relevant criteria,” the Commission’s policy paper said.

Nevertheless, the GBP/USD pair has showcased some adverse movements, slumping 1.21% today, reaching 1.2289 mark. Another point of concern for the Britishers remained the hard Brexit stance of the UK PM Boris Johnson.

US Dollar Index

The economic calendar remained quiet light-weighted amid lack of significant events on Monday’s trading session. However, a few downbeat low volatile USD-specific economic events attempted to drag down the Greenback in the early afternoon session. Notably, the Dallas Fed July Manufacturing Business Index reported -6.3 points below the -5.0 points forecasts. Anyhow, the Treasury Bill Yields came out higher than the market expectations. Noticeably, the 3-month Yield recorded 2.07%, and 6-month Yield figures rounded near 2.035%.

The USD Index kept the positive trend intact, taking intermediate rests at a 10-day old slanting ascending support line. The Index had successfully marched above the robust 97.79 resistance, shifting the target towards 98.28 resistance. Also, the Relative Strength Index (RSI) soared, reaching 64.30 mark, which reveals a slightly intense buyer’s interest. Greenback’s drop beyond 97.50 level would have signaled for its weakness unless it breaks the below lying SMA confluence.

EUR/USD

Fiber’s attempt to breach and make a breakthrough out of a descending triangle pattern went flop until 17:42 GMT. The Fiber bulls seemed to have lost hold on the pair’s price actions.

Even if the pair had made a move to the upside, multiple barriers stalled at 1.1226 and 1.1286 levels would have got activated. The economic calendar contained low volatile EUR-specific events today. Italy July CPI and HICP remained top in the event list on Monday.  The YoY CPI data remained in line with the market hopes while the MoM data reported -0.6% over 0.2% estimates. Also, the Italian YoY HICP recorded 0.7% in comparison to the 0.8% market hopes. Quite interestingly, the June Italian YoY Retail Sales came out 0.5% higher than the street expectations of 1.7%.

AUD/USD

Healthy 0.6911 resistance handle confined all the upside moves of the Aussie pair today. Notably, the AUD/USD pair was underway a tumbling rally that had triggered from 0.7081 mark. This current downtrend channel appears narrower but has already drained away most of the accumulated gains since the start of July. 

Meantime, the resistance conflux consisting of the 50-day, 100-day, and 200-day SMA stood firm on the upper side. However, today, the pair were struggling to make a breakdown from the 0.6903 support handle.

Nevertheless, the sellers seemed to possess more dominancy over the AUD/USD, seeing the weaker RSI levels. The RSI was indicating 17.21 levels, depicting heavy selling. Also, the red histograms of the Moving Average Convergence Divergence (MACD) were pointing to the south, tightening bear control.