Mark Jo

EURGBP

The EURGBP plummeted approximately 100 pips as reports coming from the Brexit negotiations turned positive.

Boris Johnson even though has expressed his disappointment in the Brexit deal, has been advised not to walk away from the negotiations after today’s deadline day.

Reports coming from the UK are suggesting both parties are prepared to extend talks into the year-end if a deal isn’t struck during today’s EU summit.

There is still a possibility of a no-deal, therefore traders buying the GBP should trade with extreme caution.

It seems the only point that’s left to be addressed in the negotiation is “FISHERIES” and even though the two sides are far apart in agreement, this also provides some positive sentiment.

With only the one topic of discussion left, there is a possibility of a preliminary deal being pushed through. Although any agreement may not live up to the expectations of the market.

In the light of this news, we’ll focus on EURGBP Daily charts:

Sentiment shows that traders have been actively fading EURGBP on positive Brexit news. However, the current falling wedge flag structure shows to short with extreme caution. Currently, the pair is trading on the bottom trend line leading into the EU session.

EURGBP 4 Hour Chart

Over the past couple of weeks, trading EURGBP hasn’t been easy going for a lot of traders because of the extreme ups & downs as you can see in the chart.

However, the current market sentiment seems to be more of a positive one because of the positivity on the Brexit deal.

When you look at the technicals, it shows a falling wedge pattern which can indicate that any result of a no-deal Brexit, prices could breakout to the upside causing a possibility of an uptrend.

However, with a positive result today, a break to the downside will release a huge amount of pressure on this pair and we’ll see a further bearish trend developing.

USD/CHF

The USD/CHF currency pair, has seen a strong downside movement over a few months due to COVID-19 and the ensuing economic crisis.

The USD on Wednesday keeps plummeting, falling from the 0.98 to the 0.92 , and then back up again, before proceeding to drift lower holding a bearish tone.

Today, USD/CHF trades at the 0.91 handle.

USDCHF Daily Chart

A weaker US dollar across pushed the pair to the downside.

Equity prices in Wall Street turned decisively to the downside following comments from US Treasury Secretary Mnuchin about stimulus talks.

Previously, the greenback and markets were moving sideways without a clear trend.

Looking at fundamentals in the US, the Producer Price Index (PPI) climbed 0.4% in September, surpassing markets expectations of a 0.2% increase.

Today, the weekly jobless claims report is due. Market participants continue to focus on stimulus talks, Brexit negotiations, and US politics.

From a technical point of view, the improvement in USD/CHF seen on Tuesday was short-lived.

The dollar needs to rise and hold above 0.9160 to clear the way for a more significant recovery.

A further bearish trend prevails . A slide under 0.9085 (October low) would likely lead to a test of 0.9050.

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