MARKET DEVELOPMENT – GBPUSD Slides to Flash Crash Lows
GBP: The Pound is once again on the backfoot as the currency challenges its 2019 lows. UK data continues to deteriorate with the latest BRC sales report showing sales at UK retailers rose at the slowest pace on record. In turn, this provides yet another reminder that growth in the UK economy is likely to have contracted in Q2. Consequently, amid the backdrop of rising no-deal Brexit risks and with UK data continuing to disappoint, commentary from BoE rate setters will be eyed closely. Reminder, BoE’s Tenreyro (Wednesday) and Vlieghe (Friday) are due to speak this week. 2019 lows reside at 1.2435, support at 1.2435-40 being tested as EURGBP oscillates around the 0.9000 handle. Speculators are also very bearish on the Pound.
USD: The greenback has remained bid throughout the European session with eyes focusing on the testimony from Fed Chair Powell. The pricing out of a 50bps cut at the end of the month has continued to underpin the DXY, which in turn has seen EURUSD test 1.1200 on the downside. Fed members Bullard and Bostic due to speak later, however, much of the focus will be placed on Powell tomorrow.
Source: DailyFX, Thomson Reuters
WHAT’S DRIVING MARKETS TODAY
- “USD Price Outlook: More Gains Possible Ahead of Fed Meeting” by Martin Essex, MSTA , Analyst and Editor
- “GBP Most Bearish Currency, CAD Longs Surge – COT Report” by Justin McQueen, Market Analyst
- “Canadian Dollar Price Analysis: USD/CAD Sellers Await BOC and FED Powell” byMahmoud Alkudsi , Market Analyst
- “Using FX To Effectively Trade Global Market Themes at IG” by Tyler Yell, CMT , Forex Trading Instructor
— Written by Justin McQueen, Market Analyst
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