Long GBP/USD (31-Oct)
Real-Time AmpGFX – Sold GBP/USD to close opportunistic long (Wed 10/31/2018 11:19 PM MT)
Sold one unit GBP/USD at 1.2843
There has been little follow through on the Times article, and it is short on details. It may relate to stop-gap measures to maintain access to clearing markets after Brexit, which is not new.
The FT reports some pushback from unnamed officials in the EU suggesting progress on the Northern Island border issue remain still far from resolved.
We are worried that then lift in GBP on these renewed hopes may be maxed out until there is harder evidence that breakthroughs are near.
In the meantime, we are reluctant to be holding short USD positions through the US payrolls report on Friday.
In general, we see a very difficult trading market in FX at the moment and are trying to place risk cautiously.
We have been spending a lot of time this week trying to hone our view, and are struggling to establish a firm basis to trade.
Real-Time AmpGFX – Bought GBP/USD on Times report (Wed 10/31/2018 6:56 PM MT)
Bought one unit GBP/USD at 1.2842
We are viewing this as an opportunistic trade on the back of reports in the UK Times that the UK Government Brexit negotiators have struck a deal giving UK banks continued access to EU markets after Brexit.
Earlier on Wednesday hopes of a deal being struck on the Northern Ireland border issue were lifted by a letter from UK’s lead negotiator Raab to his colleagues suggesting a deal is making progress, anticipating it would be finalised by 21 November.
These are inconclusive developments and still leave doubt on a range of issues, but they should tend to raise the market’s expectation that a deal can be struck that achieves UK parliamentary approvals.
We may be looking to take profit ahead of the US payrolls report, but we sense that in the immediate response to the news, it may tend to lift other currencies against the USD, including the EUR, given both are trading near recent lows.
Long one unit GBP/USD at 1.2842; s/l 1.2753; t/p 1.3128 (capital at risk 0.71%)