Trade Idea (2020-10-16) GBP fell over 100 pips

Trade Idea

Good morning.

Yesterday’s US stocks closed with a modest decline in all three indices, almost flat level. Overall, it is basically risk off mood, but the downside is likely to be firm.

GBP fell by more than 100 pips yesterday on the roller coaster every day on the “down” day, and the surge on the previous day was canceled. GBPUSD was temporarily sold to 1.2891. In addition to the sense of caution about UK-EU trade deal, concerns about the spread of the second wave of infection of COVID-19 is also affecting. Stricter lockdown will take place in London from midnight on the 16th. EU summit leaders urged UK to continue trade negotiations “in the coming weeks” and take the necessary steps towards an agreement, while UK gave “surprise and disappointment” to the EU summit. UK will announce the response today.

EUR continues to fall. Against the second wave of infection of COVID-19 in Europe and risk-off USD buying, it fell to 1.169 and closed US market around 1.1707. AUD dollar has fallen even deeper, dropping to 0.705 temporarily.

EURUSD H1 (Please click the chart to enlarge.)

GBPUSD H1 (Please click the chart to enlarge.)

Market Environment

Yesterday’s currency strength

US market yesterday

DJIA: 28,494.2 (-19.8, -0.07%)
NASDAQ: 11,713.87 (-54.86, -0.47%)
S&P 500: 3,483.34 (-5.33, -0.15%)
GOLD: 1,910.7 (+1.8)
OIL: 40.94 (-0.02)
US 10-YR: 0.734 (UNCH)
VIX: 26.97 (+0.57)

Asian market today

Nikkei: 23,481~ (-25)
CME Dow future: 28,405~( -89 Dow)

Economic indicators today

GMT 12:30 (US) Retail sales
GMT 14:00 (US) Michigan Consumer Sentiment