Brexit going to hurt the UK economy?
A report prepared by the UK government showing that the uk economy will be hit in any Brexit scenario leaked yesterday. Government minister tried to play down the important of the report, however media persisted on the issue.
The issue seems to be confirmed as U.K. banks may have limited access to the EU single market after Brexit negotiator Barnier's recent statement. hence confirming EU's chief Brexit negotiator Barnier's facing a small rebellion with in the Tory party. These should not be good news about the GBP as political instability may increase and should the negative headlines continue, the GBP could be weaken.
In contrast to yesterday Forecast for a bearish market, cable posted some to gains, testing the 1.4175 (R) resistance line. we see the case for cable for the pair to enter a slightly bearish Yesterday's rise,we see the case for the pair to enter a slightly bearish market as the greenback side of the pair may strengthen by today's fundamental and financial data.
Should the 1.4175 resistance level and test the 1.4325 resistance barrier. should the bears have the upper hand, we could see the pair breaking the 1.4040 support line and hover slightly below it.
No change is expected in the policy rate from the 30-31 January FOMC meeting Currently the market seems to have priced in the probability of the FOMC to remain on hold, at 95.0% as implied by the Feds Funds Futures (FFF). Thus market focus slowdown of the case for an upbeat assessment of the economy, despite the recent slowdown of the GDP growth rate. it could be the case, that a more hawkish tone will dominate the statement in order for the Fed to accommodate a possible rate hike in March.
At this point, pelase be advised that this will be Chiar Janet Yellen's last FOMC meeting. Also a number of the FOMC member will change as part of the Feds rotating system. it could be the case that the FOMC will have a more hawkish tone from now on as a result of that switch.
The EUR/USD may in a sideways manner Yesterday, staying well within the range set by the 1.2355 support line and the 1.2495 resistance line.
The pair could continue to trade in a sideways manner over the short term, however there could be some selling pressures as the US dollar may strengthen with the EUR side of the pair could weaken as financial data, due out today could see it breaking the pair come under selling interest we could see it breaking the 1.2355 support level and aim for the 1.2230 support barrier.
should it come under buying interest, we could see it breaking the 1.2495 resistance level and aim for the 1.2600 resistance hurdle.
As for today’s other economic highlights:
During the European morning we get France's preliminary CPI rate for January, germany unemployment rate for January, Eurozone's preliminary inflation rate for December.
We see the case for the negative effect of the inflation slowdown, of both France and the Eurozone to overshadow and positive impact of the German and Eurozone unemployment rates release.
later on we get Canada's GDP data for November and the US ADP National Employment indicators which could support the greenback to carry a positive sign for the first time in a long period. Last but not least as mentioned in the analysis before, we get the FOMC's intrest rate decision. As for speakers Riksbank Governer ingves speaks.
A report prepared by the UK government showing that the uk economy will be hit in any Brexit scenario leaked yesterday. Government minister tried to play down the important of the report, however media persisted on the issue.
The issue seems to be confirmed as U.K. banks may have limited access to the EU single market after Brexit negotiator Barnier's recent statement. hence confirming EU's chief Brexit negotiator Barnier's facing a small rebellion with in the Tory party. These should not be good news about the GBP as political instability may increase and should the negative headlines continue, the GBP could be weaken.
In contrast to yesterday Forecast for a bearish market, cable posted some to gains, testing the 1.4175 (R) resistance line. we see the case for cable for the pair to enter a slightly bearish Yesterday's rise,we see the case for the pair to enter a slightly bearish market as the greenback side of the pair may strengthen by today's fundamental and financial data.
Should the 1.4175 resistance level and test the 1.4325 resistance barrier. should the bears have the upper hand, we could see the pair breaking the 1.4040 support line and hover slightly below it.
No change is expected in the policy rate from the 30-31 January FOMC meeting Currently the market seems to have priced in the probability of the FOMC to remain on hold, at 95.0% as implied by the Feds Funds Futures (FFF). Thus market focus slowdown of the case for an upbeat assessment of the economy, despite the recent slowdown of the GDP growth rate. it could be the case, that a more hawkish tone will dominate the statement in order for the Fed to accommodate a possible rate hike in March.
At this point, pelase be advised that this will be Chiar Janet Yellen's last FOMC meeting. Also a number of the FOMC member will change as part of the Feds rotating system. it could be the case that the FOMC will have a more hawkish tone from now on as a result of that switch.
The EUR/USD may in a sideways manner Yesterday, staying well within the range set by the 1.2355 support line and the 1.2495 resistance line.
The pair could continue to trade in a sideways manner over the short term, however there could be some selling pressures as the US dollar may strengthen with the EUR side of the pair could weaken as financial data, due out today could see it breaking the pair come under selling interest we could see it breaking the 1.2355 support level and aim for the 1.2230 support barrier.
should it come under buying interest, we could see it breaking the 1.2495 resistance level and aim for the 1.2600 resistance hurdle.
As for today’s other economic highlights:
During the European morning we get France's preliminary CPI rate for January, germany unemployment rate for January, Eurozone's preliminary inflation rate for December.
We see the case for the negative effect of the inflation slowdown, of both France and the Eurozone to overshadow and positive impact of the German and Eurozone unemployment rates release.
later on we get Canada's GDP data for November and the US ADP National Employment indicators which could support the greenback to carry a positive sign for the first time in a long period. Last but not least as mentioned in the analysis before, we get the FOMC's intrest rate decision. As for speakers Riksbank Governer ingves speaks.
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