Media suggested yesterday, that South Korean President Moon is pushing for further negotiations. Specifically, he asked the US to lower their threshold and North Korea to show some willingness for denuclearisation. The US seems to be willing for further negotiations, however, President Trump mentioned: “We’ll see what happens”. Also, S.Korea officials asked N.Korea for the humanitarian issue of allowing the resumption of visits between separated families. USD/JPY traded in a sideways manner in the past few days, near the 106.95(R1) resistance line. We see the case for the pair to continue to trade in a sideways manner, however, we could experience some bearish tones should Powell’s Congressional testimony contain some neutral and/or dovish tones. Also, the market could be influenced by a possible negative turn in the Durable Goods indicator, which is to be released later today. On the technical side, the pair keeps trading below a downward trend line incepted since the 8th of January. Should the pair come under buying interest, it could break the 106.95(R1) resistance line, the prementioned downward trend line and aim for the 108.30(R2) resistance level. Should it come under selling interest we could see it breaking the 105.55(S1) support line.
- Support: 105.55(S1), 104.66(S2), 103.65(S3)
- Resistance: 106.95(R1), 108.3(R2), 109.20(R3)
EU intensifies Brexit confrontation
The EU is expected to publish a 100 pages draft Brexit treaty which could challenge the main points of the UK diplomacy. The draft is expected to set out how the Brexit is to be implemented in one year’s time with legal details. The timing of the publication gains on importance as yesterday, Jeremy Corbyn explained his own vision of Brexit and Theresa May is about to explain hers, all ahead of the EU summit in three weeks. Should there be further negative headlines about Brexit, the GBP is expected to weaken. Cable spiked yesterday, breaking the 1.4040(R1) resistance line, only to correct later on and relent any gains it had made. We see the case to continue to trade in a sideways manner, however, it may be influenced by any further Brexit headlines, as well as the US financial data which are to be released today and Powell’s testimony before Congress. Technically the pair trades above the upward trend line, incepted since the 13th of November. Should the bulls have the upper hand we could see it breaking the 1.4040(R1) resistance level and aim for the 1.4168(R2) resistance barrier. On the other hand, should the bears take the driver’s seat, we could see the pair breaking the 1.3850(S1) support line.
- Support: 1.3850(S1), 1.3750(S2), 1.3615(S3)
- Resistance: 1.4040(R1), 1.4168(R2), 1.4325(R3)
Today’s other economic highlights:
From France, we get the consumer confidence indicator, from the Eurozone the Business Climate indicator, the Economic Sentiment indicator, the final consumer confidence indicator and from Germany the HICP rate. All the prementioned indicators and the HICP rate are for February, are set to have slight drops and could weaken the EUR. From the US we get the Durable Goods growth rate for January which is forecasted to slow-down significantly and even turn negative. Later on, we get the US Consumer Confidence indicator for February which is forecasted to increase somewhat. As for speakers, ECB’s Yves Mersch and Buba President Weidman speak. Later on, Fed ‘s Governor Jerome Powell is to deliver his first congressional testimony. Powell’s testimony is expected with great anticipation by the market and could cause some volatility to USD crosses.
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