Brexit chaos adds negative scenario for emerging currencies .:
Today’s meeting between Brexit negotiators will give further clarity of Pound’s move :
The risk-off is now getting-in in emerging currencies ,. Admittedly the biggest happening in FX space is pound which shed nearly 1% of its value against the US dollar on Monday and futures markets were braced for a rise in volatility, after Brexit risks returned to haunt the UK currency and put a stop to a strong summer run as mentioned in FT. Looking at the present volatility, rupee may follow the negative path barring any major flows do not hit in intraday session.
The pound slumped to $1.3161 by early afternoon on Monday, losing 0.91% against the dollar after the Financial Times reported that the UK government was planning legislation that would override keys parts of the withdrawal agreement. The currency also slipped 0.8 % lower against the euro. So far pound has gained about 4 per cent against the dollar since June amid overlooking the Brexit risk.
For the day, important meeting between the EU and the UK Brexit negotiators will further guide the sterling move. However options positioning still suggest a sharp rise in volatility can be expected in pound and further the outcome of the today’s meeting likely to remain less optimistic as what market expects. Accordingly pound will remain weak based on the latest tweaks in Brexit chaos.
TREND : WEAK BEARISH
Time : 08/09/2020
Pivot : 1.3176
Technical View : LONG ABOVE 1.3196
Target : 1.3216, 1.3229, 1.3287, 1.3385
Technical View : SHORT BELOW 1.3156
Target : 1.3136, 1.3096, 1.3065, 1.2997