Analytics

News, Trends, & Analytics 02.10.2019

Boris Johnson has proposed changes to the Brexit agreement

Russia is making big FX moves, The Fed has a plan to return to desire inflation, & The U.K.’s Boris Johnson has a new Brexit plan.

 

News

British Prime Minister Boris Johnson pitched new proposals on Tuesday for an amended Brexit agreement that would remove the contested insurance policy for the Irish border, but EU officials sounded skeptical about the chances of a breakthrough. Affects GBP


Russia’s finance ministry is expected to increase its purchases of foreign currency for state reserves in October, a Reuters survey showed on Tuesday. Affects RUB


Oil prices rebounded on Tuesday on reports that output from the world’s largest oil producers fell during the third quarter, although a resumption in Saudi supply and demand concerns kept a lid on gains. Affects Brent


The dollar held at a 29-month high on Tuesday as renewed evidence of strength in the U.S. economy encouraged investors to buy the greenback. Affects USD


The Federal Reserve has set monetary policy to where it can deliver on its 2% inflation goal and there is scope to raise rates slightly over the next few years if the economy continues to grow, Chicago Fed President Charles Evans said on Tuesday. Affects USD

 

Calendar

08:30 GMT

The British Construction PMI for September will be released. The Chartered Institute of Purchasing and Supply (CIPS) Construction Purchasing Manager’s Index (PMI) measures the activity level of purchasing managers in the construction industry. Affects GBP.


12:15 GMT

The U.S. ADP Nonfarm Employment Change for September will be published. The ADP National Employment Report is a measure of the monthly change in non-farm, private employment, based on the payroll data of approximately 400,000 U.S. business clients. Affects USD.


14:30 GMT

The U.S. Crude Oil Inventories will be reported. The Energy Information Administration’s (EIA) Crude Oil Inventories measures the weekly change in the number of barrels of commercial crude oil held by US firms. Affects Brent.

 

Technical analysis

GBP/USD

Britain should leave the EU on October 31, but Boris Johnson still does not have an agreement with Brussels. He probably won’t be able to find a compromise in such a short time. Earlier, Queen Elizabeth II signed a law prohibiting Brexit without an agreement on cooperation with the EU. For this reason, the likelihood that the kingdom will leave the union at the appointed time is gradually decreasing.

The price of the British currency continues to decline. Technical analysis says that this trend can continue.

AUD/NZD

It is unlikely that this asset will grow after the Reserve Bank of Australia has lowered the rate. The activation of the bears is possible at the Fibonacci levels of 1.07750, 1.07900 or 1.08000.

USD/RUB

The currency pair is actively rising in price amid reports that the Russian Ministry of Finance will begin purchasing foreign currency. However, the asset may wait for a downward correction due to it being overbought.

 

AUD/NZD on this day in history

  • Since 2000 October 2nd has been a trading day 14 times.
  • On 35% of those days, the asset ended with growth.
  • The maximum reinforcement range was 0.88%
  • The trend down was limited to 0.86%.
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