{"id":144018,"date":"2019-03-20T12:15:29","date_gmt":"2019-03-20T16:15:29","guid":{"rendered":"https:\/\/www.countingpips.com\/?p=144018"},"modified":"2019-03-20T11:59:13","modified_gmt":"2019-03-20T15:59:13","slug":"gbp-sells-off-on-short-term-brexit-delay-request","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex\/2019\/03\/gbp-sells-off-on-short-term-brexit-delay-request\/","title":{"rendered":"GBP Sells Off On \u201cShort-Term\u201d Brexit Delay Request"},"content":{"rendered":"
March 20, 2019<\/div>
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By <\/strong>Orbex<\/strong><\/a><\/p>\n

May\u2019s Letter to EU<\/strong><\/h2>\n

The main market-moving news on Wednesday was that the\u00a0UK PM will formally request<\/strong>\u00a0an extension of\u00a0<\/strong>the Article 50 process by 3 months<\/strong>. GBP had been trading firmer in response to news last week that Brexit could be delayed. However, such a short extension might leave the market disappointed as uncertainty remains elevated. This should put pressure on GBP.<\/p>\n

UK Inflation Modest<\/strong><\/h2>\n

On the data front, UK CPI came in mixed. The headline figure exceeded expectations, while the core reading was lower than forecasts. The market is now keen to hear the\u00a0BOE\u2019s latest assessment tomorrow.\u00a0<\/strong>Special attention will be paid to its views on the Article 50 extension and how this will affect the BOE\u2019s monetary policy decision. 1.33 remains the key levels which bulls need to break to encourage further upside in the short term.<\/p>\n

Euro Remains Somewhat Firm<\/strong><\/h2>\n

Little in the way of data for the EU today leaves\u00a0EUR trading off USD flows.\u00a0<\/strong>The latter is a little firmer ahead of the FOMC meeting, keeping EURUSD little below yesterday\u2019s 1.1361 highs. While the Fed is not expected to shift its stance in the near term, USD has been better supported today with equities coming off some.<\/p>\n

Equities Off Recent Highs<\/strong><\/h2>\n

Equities have traded lower<\/strong>\u00a0in response to news of May requesting only a short extension. The market had been preparing itself for as much as a two-year extension. This would have put an end to Brexit uncertainty for a while. However, such a short extension merely delays the still, very real risk of a\u00a0no deal Brexit<\/a>. It is unlikely to offer enough time to actually resolve the remaining issues. The SPX500 is now retesting the 2820 support level from the last broken swing high in this bullish sequence.<\/p>\n

Gold Gains Capped by Dollar<\/strong><\/h2>\n

Despite the downtick in risk appetite today,\u00a0gold prices have been a little softer<\/strong>\u00a0as a stronger USD has capped any further upside at this stage. A reaffirmation today of the\u00a0Fed\u2019s view that rates will remain on hold<\/strong>\u00a0over the coming months should create some upside room for gold, however, as the US Dollar is likely to be knocked lower again. 1311.27 remains the key level which bulls need to break. However, there are upside risks for USD. With recent data points surprising to the upside, should the Fed acknowledge any of this blue sky, we could see USD trading with a bid tone on the back of the meeting.<\/p>

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Yen Provides No Directional Bias<\/strong><\/h2>\n

Yen remains fairly subdued here. The bias is still bearish for now, on the back of last week\u2019s BOJ meeting where the central bank reaffirmed its commitment to maintaining an easing presence. Despite continued criticism over its stimulus, the\u00a0BOJ warned against worsening global conditions<\/strong><\/a>\u00a0and the need for negative rates to remain in place. Bulls will need to see USDJPY break 110.76 to see any shift in bias.<\/p>\n

Aussie Rejected by $71c. Once More<\/strong><\/h2>\n

AUD price action has ground to a near halt recently as a\u00a0lack of volatility across the FX market<\/strong>\u00a0has taken a toll on the high-beta pairs. AUD remains hemmed in by the bearish trend line from 2018 highs while the 0.7021 level continues to hold as support. On the upside, the exchange rates struggle to break beyond the 71 cent hurdle.<\/p>\n

By <\/strong>Orbex<\/strong><\/a><\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

By Orbex May\u2019s Letter to EU The main market-moving news on Wednesday was that the\u00a0UK PM will formally request\u00a0an extension of\u00a0the Article 50 process by 3 months. GBP had been trading firmer in response to news last week that Brexit could be delayed. However, such a short extension might leave the market disappointed as uncertainty […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-144018","post","type-post","status-publish","format-standard","hentry","no-post-thumbnail"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/144018","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/comments?post=144018"}],"version-history":[{"count":2,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/144018\/revisions"}],"predecessor-version":[{"id":144025,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/144018\/revisions\/144025"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/media?parent=144018"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/categories?post=144018"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/tags?post=144018"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}