Pressure rises for May
IronFX | Feb 26, 2018 06:23AM ET
Pressure rises for May
- Media suggested that Labour Party’s leader Corbyn will clarify the party’s position regarding Brexit. The Labour Party is expected to have a positive stance towards a customs union with the EU, in contrast to Theresa May. It could be the case that Labour Party’s positioning regarding the customs union issue will deepen the gap in the already divided Conservative party. In the inner political stage, May will introduce a legislation that caps energy prices until 2020. The news could support the pound in the next couple of days as the positive sentiment could continue, despite the pressure.
- Cable traded in a sideways manner on Friday, well between the resistance level of 1.4040(R1) and the 1.3850(S1) support level. We see the case for the pair to trade in a slightly bullish market for the next couple of days. The case is supported by the fact that the pair has traded above the upward trend line incepted since the 13th of January. On the fundamental side, BoE’s Ramsden’s Saturday comments about sooner than expected rate hikes may have generated a positive sentiment for the pound, also strengthening the argument for its support. The US financial news, which is to be released today, however, may support the US dollar somewhat. Should the pair enter a bulls market, we could see it breaking the 1.4040(R1) resistance level and aim for the 1.4168 (R2) resistance hurdle. Should the bears take the driver’s seat, we could see the pair breaking the 1.3850 (S1) support.
Mixed messages for cryptocurrencies
- Headlines last week suggested that Japan’s cryptocurrency industry is preparing a self-regulatory body. On the European stage, British lawmakers launch an inquiry into cryptocurrencies. While in the US, the Congress sets sights on federal cryptocurrency rules, and the founder of BitFunder exchange was arrested following a lawsuit, for fraudulently running an unregistered securities exchange. In other news, Venezuela launched a new cryptocurrency the Petro with its first sales to be offered in private.
- Bitcoin was dropping over the past few days breaking the 10,000 USD psychological threshold, nearing the 8650 (S1) support line. We see the case for the pair to continue in a slightly bearish market for the next few days. Should the cryptocurrency come under selling interest, we could break the 8650(S1) support line and aim for the 7425(S2) support level. Should it find buying orders along its path, it could aim for the 11600(R1) resistance level or even for the 12365 (R2) resistance hurdle.
Today’s other economic highlights:
- From the US we get the new home sales for January. As for speakers, FOMC member Bullard, ECB’s president Draghi and BoE’s Cunliffe speak.
Get The News You Want
As for the rest of the week:
- On Tuesday, Eurozone’s and US consumer confidence, as well as Germany’s HICP all for February, are due out. On Wednesday China’s PMI, France’s CPI (EU Norm.), Germany’s unemployment rate and Eurozone’s CPI are to be released. On Thursday we get Mfg PMIs from France, Germany, Eurozone, UK, and US for February, as well as Eurozone’s unemployment rate for January and on Friday Japan’s unemployment rate for January and Canada’s GDP for December are to be released.
GBP/USD
·Support: 1.3850(S1), 1.3750(S2), 1.3615(S3)
·Resistance: 1.4040(R1), 1.4168(R2), 1.4325(R3)
BTC
·Support: 8650(S1), 7425(S2), 5710(S3)
·Resistance: 11600(R1), 12365(R2), 13560(R3)
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