As we close this trading week, China releases its data on Q3 GDP at 6% YoY. This is the lowest level for 27 years. The US-China trade war is by far the biggest contributor to the decline but this years’ massive pork shortage, ongoing turmoil in Hong Kong and souring consumer sentiment are also a driving factor.
The United States released its real estate statistics and initial jobless claims. Building permits came out at better than expected at 1.387M, while housing starts came out below the forecast at 1.256M. Initial jobless claims increased at a faster pace than expected, at 214K.
The Turkish lira has been declining since President Donald Trump withdrew troops from Syria and Turkey began its advance to make a safety border between Syria and Turkey. US Vice President Mike Pence met with President Erdogan for a lengthy discussion, after which Turkey agreed to withdraw troops for a 120-hour ceasefire to give Kurdish-led forces a chance to withdraw.
As a result, the Turkish lira recovered after bouncing from the 61.8% Fibo level on October 14. We can see it on a daily time TF for USDTRY.
The British Pound is rising on Prime Minister Boris Johnson’s Brexit deal. The European Commission President Jean-Claude Juncker characterized the new Brexit agreement as ‘fair and balanced’. PM Johnson now has less than 36 hours to convince and get the deal through parliament at the House of Commons in Westminster. PM Johnson does not hold the majority of vote and requires the backing of 320 Members of Parliament. His biggest opposition remains the Democratic Unionist Party, which states that ‘These proposals are not, in our view, beneficial to the economic well-being of Northern Ireland and they undermine the integrity of the Union’.
If Johnson fails to get the deal through parliament, he is required by law to request another extension for Brexit according to the Benn Act, which had been passed by parliament to avoid a no-deal Brexit.
On a Daily TF of the GBPJPY chart, the pair broke the 61.8% Fibo level up and bounced from the resistance around 141.507. Today, there is a doji candle close to 140, as traders and investors are looking forward to tomorrow’s outcome.
If PM Johnson succeeds the next targets up will be the resistance level, first at 141.507, then 143.831, followed by 145.396 and 147.018. If he fails to convince the MPs the pound will drop with targets down at the 50% Fibo level 136.522, then 38.2% Fibo at 134.167 and then 23.6% Fibo at 131.252.