Monday saw a fairly muted start to the week with only GBP in the FX world providing some relief. Tuesday started off in similar fashion. Crypto had one of its quietest sessions for a long while with BTC stuck around the $9,500 level and ETH at $209. 

All of a sudden, we get a little flurry to the topside as BTC hits $9,700 and ETH goes to $212. Not a whole lot to more to say. Familiar ranges, familiar levels and a market that doesn’t know which way it wants to go.

For FX, it’s a case of déjà vu. GBP suffers once more falling all the way to 1.2120, just shy of the major support I highlighted yesterday at 1.2108. 

Increasing concerns for a no-deal Brexit are constantly weighing on the pound. The meeting between PM Boris Johnson and the Scottish First Minister Nicola Sturgeon, highlighted how much division there is within the UK. 

Scotland very much wants to remain a part of Europe and you rather wonder how long it will be before there is another referendum for Scottish independence. 

As the day progresses, GBP gets a relief bounce back to 1.2180. Some rather brash comments from President Trump has US stocks open on a negative footing and this in turn takes USDJPY lower to 108.45. Elsewhere, AUD’s break of 0.6900 takes us down to 0.6870. 

USDCAD rallies to 1.3192. EUR continued to frustrate the bears squeezing back to 1.1160 in quiet trading. Europe goes home and equities start to make back some of their earlier losses. 

USDJPY rallies back to 108.65 and USDCAD drops back to 1.3155. Not overly exciting. That, at least in theory, comes tomorrow. For today, equities close a little lower with the DJ down 23 points. Gold rallies to $1,432 an ounce ahead of the fun tomorrow.

Going to take a quick look at EUR/AUD today. Only two weeks ago AUD looked like it was going to break out higher. Nine straight losing days and now we are challenging levels against the USD that could open up even further losses. Against the EUR we have an interesting chart pattern, thus my desire to share. 

From the hourly chart you can see a well constructed head and shoulders pattern, which looked almost odds on to take us lower – and then didn’t. 

Today we have rallied up to the second shoulder. From here you might well expect a rally past the top of the head and onwards and upwards. Keep an eye on this pair. Sometimes the crosses can give better trading opportunities than just looking against the USD.

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David Hannigan

A graduate of the Cass Business School, Dave's career began with Credit Suisse as an Equity Options Trader on the London Stock Exchange, before moving into the world of FX with Chemical Bank and Citibank. 1994 saw him join National Australia Bank, first as a Senior Dealer, then Senior Vice President and Chief Dealer.

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