Brexit Headlines Offer Cable Longs

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Last week’s flows spilled over to this week’s session during the European and London session, supporting all majors against a weaker dollar.

Pound & Aussie Best Performers

Despite the political turmoil in the UK, the latest developments to make a no-deal Brexit on October 31st legally impossible seem to be supporting the British pound.

Not only is cable trading near fresh July highs at $1.2370, but it’s doing so with negligence of disappointing manufacturing production figures (0.3% act vs 0.8% exp). The dollar is indeed weaker, but none of the other majors surged as much as the pound. Apart from a relatively strong Aussie, that is.

The Australian dollar continues soaring as risk capital sizes remain at elevated levels. AUDUSD trades closer to the 63 cents mark this morning with the next strong resistance laying near the 69 cents. Should the day close on a positive note, the currency pair would mark its sixth consecutive winning streak.

Euro & Kiwi Also Up

Positive German exports have allowed the euro to start the week on good footing. German exports rose to 0.7% against expectations of a 0.3% raise and a -0.1% in the previous release. EURUSD remains marginally bid against the dollar. However, its appreciation seems limited to $1.105.

Meanwhile, euro traders are getting ready for this week’s ECB policy meeting, which means that eurodollar could remain mixed until the event materializes.

Kiwi, on the other hand, is performing a tad better than the euro. NZDUSD has marked six winning trading sessions already and could potentially record the seventh one today. It’s trading bid back above the 64 cents near a three-week high, but the pair’s upside looks also limited to 64.55 cents. That being said, it continues to be supported by risk flows.

Commodities Mixed, Safe-Havens Down

Both oil and gold have made limited moves during the first half of the trading session. US oil looks bid near the $57/barrel, especially after having registered four consecutive winning sessions. However, a psychological rejection could bring in some short-term pullback. Gold, on the other hand. also mixed, flirts with the massive $1500/oz level.

Equities Supported as Dollar Weakens

With the latest NFP data dragging dollar lower, equities are on a smooth ride as the next interest rates decision nears. Politics are not pushing the indices up this morning. In fact, no developments on the lingering trade war seem to be spearheading flows. It is a rather interesting shift, once again, as market participants switch their dollars for cash indices (equities).

The SPX is getting closer and closer to the 3000 psychological barrier and DXY to 98. Should the US index receive a rejection at the day’s low at 98.20, the markets will be proving a rather uncertain environment until further political or economic headlines come through.

The post Brexit Headlines Offer Cable Longs appeared first on Orbex Forex Trading Blog.

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