EURUSD depreciate after the US bond yield advantages against Germany bond with a highest level in three months, moreover ECB does not change the monetary policy and the recent economy news has been poor which means soft growth outlook. Major support is found at the 1.1290 and resistance at the 1.1390.
The sterling continued to edge higher its major pairs on Wednesday. The market forecast that the a no-deal Brexit will be avoided and delayed Article-50 in 12 of March, when the next parliamentary vote is set to take place would likely provide continued support for the Sterling in the next days.
The sterling was supported in yesterday's trading session following the speculation that UK’s Article 50 EU exit date would delay beyond March 29. On the other hand, the EU is considering a 2-year extension. PM May might place the option for MPs to formally rule out a no-deal agreement in the case of an alternative course of action in parliament.
PM May wants to delay Brexit by up to 2 months if she can not secure deal by 12 of March. On the other hand, EU proposed 21-month extension if British Parliament rejects the deal. This morning, Sterling appreciate from 1.3040 to 1.3084.
GBPUSD appreciate after PM May could make significant progress towards securing parliamentary backing for her Brexit deal this week. Today, she will be meeting with Juncker in Brussels in the hope of reaching an alternative solution to the NI backstop. Major support at 1.3000 and resistance at the 1.3217.
The next important date for the Brexit is February 27, 2019, where Theresa May will present a plan that the parliament must vote. Furthermore, Secretary Barclay had a positive meeting in Brussels concerning the NI backstop with the European Commission President saying that no one in the EU would oppose British demand for an extension.
The U.S. dollar appreciated after the news that an agreement between the Democrats and the Republicans was reached. This outcome keeps the government shutdown on hold. Trump said that he does not expect another shutdown and this announcement is very positive for the dollar. He further stated that China is showing tremendous respect as the talks progress.
The sterling appreciated following the British government's pressure to the MPs for accepting PM May's deal otherwise a long delay in implementation might occur. The FX Market considers the scenario of positive news for the sterling. Furthermore, BOE Carney warned on the risks of no-deal Brexit and the ‘’economic shock’’ that could take place.
EURCHF remains weak upon external factors but mainly due to risk aversion. The SNB’s monetary policy shall resume within the same frame while the negative interest rate of -0.75% will be unchanged for the next quarters. On the other hand, the SNB stated that if necessary, action will be taken to cease CHF's appreciation.
Last week the EURUSD sold off until 1.1318 resuming though above the uptrend level at 1.1315. There is probability that the market holds and recovers at 1.1580 (Jan high) in the condition of a break above the 1.1620 zone. In contrast, in the event where the price drops the next support is at the 1.1270 November and December lows. Alternatively, in the scenario of a break below the 1.1270 the next level will be the 1.1180 (61.8% Fib).
The sterling trades within a narrow range ahead of BOE’s meeting this afternoon. The pressures on the British currency intensify with less than two months to go until the formal exit from the EU. Today the BOE is expected to hold a steady and ‘’ wait and see’’ policy.
The sterling resumes under pressure after the Manufacturing PMI dropped unexpectedly to 52.8, below the 53.5 threshold, upon the Brexit uncertainty. Next week the BOE’s meeting will take place with the market forecast on the Central Bank's monetary policy looking neutral.