Sterling little moved after MPs reject May’s Deal
After yesterday’s drop, the sterling was little moved in overnight trading after Theresa May lost an important parliamentary vote. The legislators opposed her proposals by 391 to 292 in a major blow to the prime minister. This happened after the attorney general warned that the concessions by the European Union were not enough. In the note, he said that the country would be forced to remain in the EU customs union against its will in case of disagreements. After this vote, the MPs will likely vote again on a no-deal Brexit or an extension. Since most of them don’t want a no-deal, they will likely vote for an extension. This extension will lead to more uncertainties for the country.
The price of crude oil was little moved after data from American Petroleum Institute (API) showed that there was a drawdown in inventories last week. The drawdowns increased by 2.58 million barrels. The reduction in inventories came a week after they increased by more than 7.9 million barrels. Later today, the Energy Information Administration (EIA) will release the inventory numbers, which are expected to show an increase of 2.9 million barrels. The commitment of traders (COT) data released on Friday showed that more traders expect the price to move up, fueled by a reduction of OPEC supplies and a relatively strong demand.
Focus will again remain on the US dollar as the country releases important durable goods data. The core durable goods orders for January are expected to grow by 0.1%, which will be unchanged from that of December. On a MoM basis, the goods are expected to decline by -0.5%. The shipments of non-defense and non-air goods is expected to drop by 0.1% in the month after being unchanged in December. Another important data release will be the PPI, which is expected to grow by 1.9%, down from the previous 2.0%. These numbers will come a day after the country released weak inflation numbers.
The GBP/USD pair was little moved in overnight trading as traders waited for another parliamentary vote later today. It is now trading at 1.3088, which is slightly higher than yesterday’s low of 1.3000. On the hourly chart, the pair is slightly below the 42-day and 21-day moving averages. The RSI is relatively unmoved at the 46 level and the price is between the 23.6% and 38.2% Fibonacci Retracement level. Today, the pair will likely be volatile as the game of chicken on Brexit continues.
The EUR/USD pair was relatively unmoved as traders focused on Brexit. The current level of 1.1285 is slightly lower than the yesterday high of 1.1300. The pair is however in a relatively upward momentum, which is fueled by the weak economic data from the US. This has seen it increase from a low of 1.1170 on Friday to the high of 1.1300. On the hourly chart, the price is along the middle line of the Bollinger Bands while the RSI has remained slightly below the 70 level. The pair will likely continue the upward momentum.
The price of US crude oil moved slightly higher after the release of lower inventories. It is now trading at $57.42, which is slightly higher than yesterday’s low of $56.90. On the hourly chart, the pair has formed a v-shape pattern, after climbing from the low of 54.70 starting on Friday last week. This price is along the middle line of the Bollinger Bands while the RSI has remained under the 70 level. The ADX has moved to below 20. There is a possibility that the pair will continue the upward momentum to test the resistance level of 60.