British pound rises as Brexit talks intensify
The British pound soared in overnight trading as Boris Johnson and Ursula von der Leyen intensified their talks in a bid to reach a Brexit deal. The two are debating on key outstanding issues like fishing and fair-playing field issues. With the UK economy going through its toughest phase in history, many economists believe that the two sides will reach an agreement before the deadline. The sterling also rose because of the decision by France to reopen its borders with the UK even as the new strain of the virus spreads. However, only drivers who test negative for the virus will be allowed to pass in and out of the country.
The price of crude oil continued to decline as worries over global growth intensified. Brent, the global benchmark, declined by more than 1.47% to $49 while the West Texas Intermediate (WTI) declined by 1.4% to $46. Later today, the price will react to the weekly inventories numbers from the US. Economists expect that data will show total inventories declined by more than 3.18 million barrels last week. That’s an increase from the previous week’s increase of 3.13 million barrels. They also expect gasoline inventories will increase by more than 1.21 million barrels.
The US dollar declined by more than 0.20% in overnight trading. In a report released yesterday, the Bureau of Statistics said that the US economy expanded by 33.4% in the third quarter. That was a better figure than the expected increase of 33.1%. GDP sales increased by 25.9%, better than the expected 25.6%. Further data showed that existing home sales declined by 2.5% to 6.69 million while the Conference Board consumer confidence data declined to 88.6. Later today, the currency will react to the country’s initial jobless claims and personal income data.
The EUR/USD pair is trading at 1.2185, which is slightly higher than the intraday low of 1.2150. On the four-hour chart, the price has moved below the 25-period and 15-period exponential moving averages while the signal and main line of the MACD have moved below the neutral line. It is also slightly higher than the ascending yellow trendline. For today, the pair may continue rising as bulls aim for the next resistance at 1.2190.
The EUR/GBP dropped slightly to the current level of 0.9090. On the four-hour chart, the price is below this week’s high of 0.9215. It is also along the short and medium-term moving averages. Similarly, the Relative Vigour Index (RVI) and the Relative Strength Index (RSI) have also started to decline. Therefore, the pair will likely continue falling, with the next key support being at 0.9050.
The XBR/USD pair dropped to an intraday low of 49.42, which is the lowest it has been since December 15. On the four-hour chart, the pair has moved below the 25-period moving average and is slightly above the lower side of the Bollinger band. The Awesome oscillator has also moved below the neutral line. The price will likely bounce back to 50 in the near term.