ad
Forex Brokers Award 2020
Vote your favourite broker
Trade 100 Bonus - the best offer on Forex market

Market Limbo ahead of FED and Brexit

Oct 28 2019, 08:48 PM (BDT) | OlympTrade.com

 

Today, the Economic Calendar is mostly empty and the market is in limbo. Soon to be former ECB President Draghi Speaks at 3 pm GMT. 

This morning, the European Union, including French President Emmanuel Macron agreed to a three-month extension for Brexit. On Friday President Macron tried to oppose the three-months extension, while favoring an extension for one-month till November 30th.     

The new agreement states that the United Kingdom may leave the European Union before the new deadline of January 31st. If a deal is sealed before that, Brexit may move forward on November 30th or December 31st

Meanwhile, Prime Minister Boris Johnson will try to push for a snap election today but is unlikely to get the 2/3 majority vote to move forward with it. If he is unable to call the election, Johnson’s Plan B is still unknown. Speculation suggests that Johnson may, himself, call for a vote of no confidence, which requires the majority of simply votes compared to the 2/3 he will need today. 

Cross-currency pairs containing the British Pound are generally in a flat, awaiting the next revelations from UK politics. 

The first half of this week’s economic calendar heavily shines on the United States. On Tuesday we expect the CB Consumer Confidence Report to be released at 2 pm GMT. On Wednesday, we have a busy day, with the ADP Non-farm payrolls being released at 12:15, followed by GDP at 12:30 and the Federal Reserve decision is at 6 pm GMT. 

The global economic slowdown may be the cause for a hawkish cut of 25 basis points (priced in at about 80%). United States GDP forecast is 1.7% QoQ – an alarming pace of growth for the largest economy in the world. 

The Bank of Canada will release their decision on the interest rate on Wednesday the 30th of October as well - at 2 pm GMT. Canada is amongst one of the few, especially of the developed economies to not lower interest rates in 2019, despite global turmoil. The last time that the BoC lowered interest rates was in July of 2015. 

The Canadian Dollar has been trading higher on increased oil prices and general election, which Prime Minister Justin Trudeau secured for a second term. 

On the Daily TF for CAD/JPY, we see that the price bounced from 61.8% Fibo level in the vicinity of 80.336 before resuming the uptrend. The price broke above and then retested 200EMA as support on October 15-16th and is currently resting at resistance around 83.245.  

ADX Indicator is showing us a strong trend, RSI is close to but not overbought. 

Resistance targets up are around 83.980, 84.356 followed by 85.046. 

Support is located first at resistance around 82.621, then 23.6% Fibo at 82.169 and coincides with the 200EMA. Further down we have the 38.2% Fibo at 81.468 and 50% Fibo at 80.902. 

 

OlympTrade.com

Olymp Trade is a reliable broker, a member of the Financial Commission of A category. This is proof of the high quality of our services and guarantees each trader deposit insurance, comprehensive support and prompt resolution of all issues.
ad