Hello, dear friends,
Breaking News of the end of the week are related to Brexit. The pound rallied overnight after upbeat comments from European Commission president Jean-Claude Juncker in which he indicated a Brexit deal remained within reach.
Sterling rose sharply closing up 0.4 per cent against the dollar on Thursday and rising again by the same percentage on Friday morning to reach $1.2581. It later dialled back some of those gains to trade down 0.3 per cent on the day by early afternoon at $1.2488.
Yet, on Friday Irish Foreign Minister Simon Coveney said “there is still quite a wide gap between what the British government have been talking about and what Ireland and the EU will be able to support. But I think we need to be honest with people and say that we’re not close to that deal right now”. Following Irish Foreign Minister comments, the pound in pair with the dollar has dropped to the area of 1.2500.
Britain has submitted some written proposals to the European Union over how the stalled Brexit agreement can be changed. Some unnamed diplomat called the documents just “descriptive papers” rather than legal texts.
According to the latest news of Friday, retail sales in Canada turned to be worse than expected by 0.1%; against this background the Canadian dollar is dropping in pair with the US dollar.
A speech by the member of the US Open Markets Committee Eric Rosengren is scheduled for today, 16:20 CEST, which is not expected to really affect the markets.
USDCAD - entry points' working out is put off to next week
For this pair, priority is given to short positions; two scenarios are considered:
- the main one - a reversal pattern will be formed within the resistance zone 1.331-1.3382. From out here the movement up to the level 1.3182 can be considered;
- if dropping starts from current levels, one can open trades for sale when entering the support zone 1.3133-1.3182 takes place. Here, an extension might be formed which will give an entry point for sales.
USDCHF - expecting decline towards the support area
At the end of the week, the chart is on its way to the zone 0.9853-0.9878. The main scenario is a reversal model formation within this range. After confirmation is received, one can open trades to buy and fix profit at 0.9958 - this is the lower border of the resistance zone.
The fallback scenario implies extension' formation within the support area and downward movement continuation. In this case, we’ll work with short positions.
NZDUSD - both bullish and bearish scenarios are considered
At the moment, the chart is located near the lower border of the support zone 0.6268-0.6304. There are two possible scenarios:
- reversal pattern formation, and growth up to 0.6413; take-profit can be placed here;
- formation of entry point for sale at the extension. In this case, take-profit should be located at 0.6200.
Copper - priority is given to buying
The chart is located close to the upper border of the support area 2.5885-2.6119. Depending on the nature of further movement, two scenarios are possible:
- reversal pattern will be formed within the support area. One will be able to buy with take-profit located at 2.6801;
- we'll start selling when the support area is broken out and the extension is formed. The target is the level 2.4835.
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