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Sterling Subdued After EU Approval26 November 2018 by Dave Evans

Morning Report: 07.00 London

There has been no Brexit bounce for the pound this morning after EU leaders approved the Brexit divorce terms this weekend. Markets had already discounted EU approval, with the real challenge being parliamentary approval. Early indications are that it will be an uphill challenge for Theresa May to put it mildly, with the vote scheduled before the 12th of December.

The GBP/USD is up slightly in line with other dollar pairs after slumping down to 1.2800 on Friday. The GBP/JPY is performing a little better, rallying and making good half of Friday’s losses. The EUR/GBP is making small gains after two days of losses on Thursday and Friday.

The pound’s nascent gains are being flattered by the weaker US dollar this morning, which is helping lift all dollar pairs. The AUD/USD is pushing higher and has now made good most of Friday’s losses.

The EUR/USD continues to struggle however, amid concerns over the region’s growth. There are small gains after hefty losses on Friday.

The USD/CHF is slipping back slightly as the dollar mounts another challenge at the parity line against the Swissy.

The USD/CAD is slipping back despite oil prices slumping well below the 2018 lows last week.

Yen pairs are generally positive, with the USD/JPY climbing above the 113.00 level. The EUR/JPY and AUD/JPY are also performing well, in line with other yen pairs.

Coming up today

German Ifo business climate is at 09.00.

ECB President Draghi speaks at 14.00.

BOE governor Carney speaks at 18.30.

Trade Idea

The euro is struggling again ahead of today’s planned speech by ECB President Draghi. After a short period of relative strength, the pressure is on again for the euro region.

By contrast, confidence in the Aussie is returning, helping the EUR/AUD to fall further.

Nov 26th 2018: Sterling Subdued After EU Approval

A good way to play this is a LOWER trade predicting that the EUR/AUD will close below 1.5600 in 14 days for a potential return of 122%.

Nov 26th 2018: Sterling Subdued After EU Approval