British Prime Minister Theresa May aims for a last-minute support on her Brexit deal in Parliament on Wednesday night. Various reports indicate some new optimism on the matter as it seems some Eurosceptic lawmakers could back Mays plan eventually. However, the Northern Irish powerbrokers were unwilling to change their mind. The UK is already in a very difficult position and the threat of a long delay, a no Brexit deal or a new referendum raise threats and further uncertainty, so May’s plan could be the best way to leave the EU. Also, on Wednesday the Parliament will hold vote on various Brexit scenarios. (Indicative votes). The votes could point out there is no majority in parliament for a substitute course of action, or else a majority for numerous. May has warned that these votes could be of no use as the EU is not willing to renegotiate modifications on the deal. Caution is advised as the GBP could come under strong volatility throughout the day. The GBP moved in sideways movement on Tuesday between the 1.3265 (R1) resistance line and the 1.3175 (S1) support line. Especially during the European afternoon, we expect the GBP to come strong volatility as noted above. In a bullish run we could see the pair moving above the 1.3265 (R1) resistance line and aim for the (R2) 1.3350 resistance barrier. In the opposite direction we could see cable dropping below the 1.3175 support level and aiming for the 1.3070 support barrier.
USD regains strength after bond yields correct
US indexes and equities along with the greenback gained support on Tuesday as the market observed the US Treasury yields stabilizing above 15-month lows. Meanwhile, Apple Inc. stocks dropped by 1% after a U.S. trade judge found some iPhone’s had breached intellectual property rights of another US company called Qualcomm. However the ruling was then rejected as the ITC found the matter should be further investigated. The two US firms have been in a legal dispute in which Apple has accused Qualcomm of unjust intellectual property rights. Qualcomm from its side has accused Apple of violating these rights. Furthermore, the USD could come under pressure today as the economic indicator could have influence on the currency as well as any news on the US Sino front. Energy stocks were seen advancing as Oil prices displayed an upward momentum due to Russia’s confirmation sticking to production cuts and expectations of weekly production deficit reading by the EIA. Oil prices surged yesterday reaching a high of 60 USD per barrel forming a strong resistance at that level. If the commodity comes under buying interest we could see Crude Oil heading for the (R2) 61.55 resistance line while even higher is the (R3) 63.12 resistance barrier. On the short side, if the commodity is to drop it could aim for the (S1) 58.49 support level and aiming even lower for the (S2) 56.52 support level.
Other economic highlights, today and early tomorrow
In today’s early US session, we get the US Trade Balance for January while at the same time we get Canadas Trade Balance for January. Also in the American session we get the EIA weekly crude oil inventories figure. As for speakers, please note that ECB’s President Mario Draghi, Ewald Nowotny, Peter Praet, Luis De Guindos , Yves Mersch (08:00,GMT), , Sabine Lautenschlaeger will be speaking throughout the day as indicated below in the calendar.
Crude Oil H4
Support: 58.49 (S1), 56.52 (S2), 54.82 (S3)
Resistance: 60.30 (R1), 61.55 (R2), 63.12 (R3)
GBP/USD H4
Support: 1.3175 (S1), 1.3070 (S2), 1.2970 (S3)
Resistance: 1.3265 (R1), 1.3350 (R2), 1.3450 (R3)
