11 December 2018

UK jobs report: Tuesday, 9:30. As members of Parliament will get ready for the vote, they will have another top-tier indicator to ponder into and so will Sterling traders. Wages remain of high importance to the pound and also to the BOE. Average Earnings accelerated to 3% y/y in September, an encouraging development. The unemployment rate disappointed with a small increase to 4.1% that month. Another shortfall was seen in the Claimant Count Change, or jobless claims, for October which rose by 20.2K, above projections. We will now get fresh figures for November.

UK vote on Brexit: Tuesday, the exact timing of the vote is unknown at this point. UK PM Theresa May reached an agreement on the withdrawal of the country from the European Union. And now, Parliament will have its “meaningful vote” on the accord. The deal ends free movement of people and secures the rights of citizens but the agreement on the “Irish backstop” is criticized by many. It ensures an open border in the Emerald Isle but ties the UK to EU regulations. Under the accord, the UK leaves the EU on March 29th, 2019, but remains in an implementation phase until at least the end of 2020. The government lost the support of the Northern Irish DUP on which it relies and many pro-Brexit members of May’s Conservative Party stated they will vote against the accord. Several opposition Labour members may support her. At the moment, it seems that the government will fail to pass the deal. In this case, the Pound may suffer quite a bit, alongside stock markets. The expectation is that the UK will then return to Brussels, achieve a few minor concessions and return for a second vote. The tweaks and the rout in financial markets would then convince members to vote for the deal. Other scenarios include the passage of the deal in the first vote, a pound-positive development that is not priced in. A third scenario is a significant defeat for the government that would clarify there is no chance for a second vote. In this case, there are growing chances of a no-deal Brexit, which would be devastating for the pound, general elections in which Labour’s Jeremy Corbyn could become PM, a second referendum, or a reversal of Brexit.

GBP
UK jobs report

UK vote on Brexit

EURUSD

The daily timeframe shows that the pair is traded above a strong support level that could be found at 1.1217. We also find that there is a good bearish opportunity around the downtrend line that is in case the pair reaches this level and shows up some bearish evidence so if this happens, we can go short targeting the level of 1.1217 during the week.

Resistance levels:	Support levels:	Recommended:
▪ 1.21 ▪ 1.1850 ▪ 1.18	▪ – ▪ 1.1217 ▪ 1.10	Waiting for the pair to reach the downtrend line.

GBPUSD

The pair managed to break through a strong support level that is 1.2550 so if the pair confirms the breakout of this level by a daily close, we can go short targeting the level of 1.2370.

Resistance levels:	Support levels:	Recommended:
▪ 1.36 ▪ 1.3350 ▪ 1.29	▪ 1.2550 ▪ 1.2370 ▪ 1.23	Waiting for the pair to confirm the breakout of the level of 1.2550.

GOLD

The pair managed to breakthrough a strong resistance level (1240) so we believe that as long as the pair is traded above it, it is highly recommended to go long targeting the level of 1245 followed by 1250 during the week. In case the pair goes down to the short-term uptrend line and shows up some bullish evidence above it, we can go long targeting the level of 1240 again.

Resistance levels:	Support levels:	Recommended:
▪ 1330 ▪ 1245 ▪ 1250	▪ ▪ 1180 ▪ 1170	We are bullish as long as the pair is traded above the level of 1240.

AUDUSD

As could be seen on the daily chart that the pair is about to reach a support area around 0.7030 so we believe if the pair goes down to reach this area and shows up some bullish evidence, we can go long targeting the level of 0.7350.

Resistance levels:	Support levels:	Recommended:
▪ 0.7550 ▪ 0.7600 ▪ 0.7260	▪ 0.7000 ▪ – ▪ –	Waiting for the pair to reach the level of 0.7030.

GBPJPY

The daily timeframe shows that the pair is about to reach a strong support level that is 140.50 so in case the pair reaches this level and shows up some bullish evidence, we can go long targeting the level of 144 during the week. This is conditioned by the continuation of trading above the level of 140.50.

Resistance levels:	Support levels:	Recommended:
▪ 156 ▪ 155 ▪ 149	▪ 140.50 ▪ 140 ▪ 139	WAITING FOR THE PAIR TO REAHC THE SUPPORT LEVEL OF 140.50

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