Trade of the Day
GBP: Markets reacted positively to the news that PM Johnson and Irish PM Varadkar, after extensive talks yesterday, can potentially see a path to a deal. GBP rallied strongly, volatility moved higher and 1-month GBPUSD risk/reversals moved above par (a premium to buy calls over puts). The UK and EU chief Brexit negotiators, Barclay and Barnier are meeting today, with Barnier also meeting with Varadkar, so Barnier’s comments post these are going to be important in regards to FX volatility.
NZD: NZD price action has mostly revolved around updates on the US-Sino trade talk front. The latest headlines have been Kiwi supportive, with President Trump saying "China has been very nice" and "we're going to see if we can make a deal." We've also seen added support for the New Zealand Dollar on the news that ANZ has raised its Fonterra milk price forecast for 2019 and 2020. Friday's New Zealand data has come in mixed and hasn't factored into price action
From a technical and trading perspective GBPNZD formed a key reversal pattern yesterday, from VWAP support, with the monthly VWAP also bullish and yesterday’s close eclipsing trendline resistance the stage looks set for a challenge of the double top and then on to challenge the equidistant swing objective at 2.0165, as such I will venture long through yesterday's high with a stop below today's low.
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Disclaimer: The material provided is for information purposes only and should not be considered as investment advice. The views, information, or opinions expressed in the text belong solely to the author, and not to the author’s employer, organization, committee or other group or individual or company.
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Patrick has been involved in the financial markets for well over a decade as a self-educated professional trader and money manager. Flitting between the roles of market commentator, analyst and mentor, Patrick has improved the technical skills and psychological stance of literally hundreds of traders – coaching them to become savvy market operators!