Trade Idea (2020-12-29) GBP selling after UK-EU deal agreement

Trade Idea

Good morning.

The US stock market yesterday after Christmas was a risk-on development. The Dow Jones Industrial Average is + 0.68%, the S & P 500 is + 0.87%, and the Nasdaq Composite is + 0.74%. President Trump’s signature on additional US economic measures and the agreement on the UK-EU trade negotiations last weekend were well received. On the other hand, the recent spread of infection has not converged, and although there is a sense of caution about mutant species, the market is increasing expectations for a vaccine-led economic recovery.

In the foreign exchange market, inflation is expected due to the rise in personal consumption next year, but long-term expectations for a weaker dollar are expected as long as the Fed’s low interest rate policy continues.

GBP after the UK-EU trade negotiation agreement was ahead of the sell. The UK economy is expected to remain in a difficult situation in the first half of next year amid the adverse effects of withdrawal on the UK economy, the spread of infections, and the problem of mutant species.

EURUSD remained in the range 1.219-1.225.

The long-term interest rate fell to 0.941%, and the VIX index remained unchanged at 21 units. Bitcoin has been flat and has been around 27,000.

EURUSD H1 (Please click the chart to enlarge.)

Market Environment

Yesterday’s currency strength

US market yesterday (last Friday)

DJI: 30,403.97 (+204.10, +0.68%)
S&P500: 3,735.36 (+32.30, +0.87%)
Nasdaq Composite: 12,899.42 (+94.69, +0.74%)
Nasdaq 100: 12,838.86 (+127.85, +1.01%)
Russel 2000: 1,996.25 (-7.70, -0.38%)
Gold Futurre: 1,882.30 (+1.90)
Oil Future: 47.81 (+0.19)
US10Y: 0.941% (+0.008)
VIX: 21.70 (+0.17)
BTC/USD: 26,958.3203 (-65.51)

Asian market today

Nikkei: 27,2354(+400)
CME Dow future: 30,402~(-1 Dow)

Economic indicators in this week

We have no important indicator today.