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Sterling Steady After Day of May16 November 2018 by Dave Evans

Morning Report: 07.00 London

This morning, the pound is stable after suffering its biggest single day loss since Brexit yesterday. The GBP/USD plunged dramatically, but still remains above the November and August lows, with small gains this morning. The GBP/JPY suffered significant losses on the day, but the November and indeed August lows remain some way off. The EUR/GBP surged, recovering all of the November losses. The general position appears to be that markets have reversed their previous (misplaced) optimism, but we are still not at the point of disaster yet. Almost lost in the chaos yesterday was retail sales coming in below expectations.

The EUR/USD rallied by contrast, helping the pair to climb off the November lows. The EUR/JPY is lower though in line with other yen pairs.

The AUD/USD remains strong, with the pair within a good session of the highs. The AUD/JPY is similarly poised, though on the back foot this morning in line with other yen pairs.

A pause in recent oil price selling has helped the USD/CAD to reverse from the highs, while the USD/CHF remains above the parity line.

The USD/JPY is lower as the yen takes control, though the November gains still hold.

Coming up today

ECB President Draghi speaks at 08.30

German Buba President Weidmann speaks at 13.00.

Canadian Manufacturing Sales are at 13.30.

Trade Idea

The euro is struggling with Italy concerns and is being pulled into the Brexit contagion. By contrast, the Australian dollar continues to sparkle.

Nov 16th 2018: Sterling Steady After Day of May

A good way to play this is a LOWER trade predicting that the EUR/AUD closes below 1.5500 in 14 days for a potential return of 153%.

Nov 16th 2018: Sterling Steady After Day of May