Pound sterling, Brexit, Turkish Lira, crude oil trending points
- High-alert GBP still appears to be supported in a hoopla
- USD inches higher against Turkish lira, as Turkey enters into a technical recession after its Q4 GDP contracted more than 3 percent, missing analysts’ expectation of 2.7 percent
- Crude oil receives a decent boost, as Saudi Arabia’s oil minister told yesterday (March 10th) that the OPEC, a 28-nation pact of oil producing nation would not be stepping off of their production cut policy on April’s gathering.
Volatile British currency in a corroboree, Turkey enters recession
On Monday, the 11thof March 2019, Great Britain Pound had begun the week higher despite intense volatility ahead of another Brexit vote, which would likely to post another large defeat for PM May’s Brexit Amendment and an extension of Article 50 seems to be highly likely, although question remains whether EU commission would not be prevailing Britain’s attempt of implementation of the Article 50.
So far, if PM May’s Brexit deal gets defeated tomorrow (March 12th), the market would likely to be in a delicate hubble-bubble and volatility would likely to get higher between March 12th-14th. For most of the Asia-Pacific trading session and European morning session, the Pound Sterling had been treading water, however after midday European session, the Great Britain Pound started to rise and at this moment, the British currency had been hovering closer to its initial resistance level at 1.31, and a daily closure above 1.31 level could reach the British currency above 1.32-1.3250 level in a near term outlook. Never the less, the Pound Sterling would likely to stay between 1.30-1.33 level, unless any negative data totters market sentiment.
GBP/USD daily price chart
On the flipside, as there had been little signs of breakthrough over talks in Brussels, PM May is expected to experience another defeat and following the likely Brexit defeat, GBP could be jolted below 1.30 to its initial support level at 1.2950, however a daily closure below 1.2950 could pivot the way towards next critical levels at 1.28 and 1.2650, while analysts in particular cautioned the investors not to bet in a GBP buying position before 1.24 level.
Over the Mediterranean, the Turkish economy had entered into a technical recession, as Q4 GDP fell well short of estimation of -2.7 percent, posting a smirching contraction of 3 percent. Monday’s (March 11th) data had raised questions whether the Central bank of Turkey would continue to forge a hawkish stance amid deteriorating growth. At this standpoint, USD/TRY paid would likely to arrange further gains, as Turkish President Erdogan calls for an easier monetary policy ahead of a local election at March 31st.
USD/TRY daily price chart
The Crude oil price receives a modest boost on Monday (March 11th), as Saudi oil Minister al-Falif told yesterday (March 10th) that an alternate move of production cut was unlikely on April’s OPEC meeting and the pact of oil producing nations would likely to maintain a production cut closer to 1.2 million barrels per day. Following the reveal of the announcement from Saudi oil minister, both US and UK crude gain more than 0.5 percent to $56.80 and $66.30 per barrel respectively, while the market may experience higher volatility.
US crude daily price chart
In a technical perspective, despite today’s upbeat market tone, the GBP would likely to falter below 1.2950 level in a near-term outlook ahead of a Brexit chaos in the UK House of Commons between March 12th-14th. However, the British Currency would likely to receive support from the possibility of an extension of Article 50, although the legislation could engage Britain a long-standing legal battle with EU Commission, meanwhile halting the Brexit for few months to years, as forecasted earlier.
The Eurasian currency, Turkish Lira would likely to jolt below its critical support level in a near term outlook, as Erdogan urged his Central bank to ease monetary policy, which would likely to initiate an evade from conventional rate hiking policy of Istanbul.
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[Disclaimer: The content of this article is personal opinion and should not be considered as investment advice or suggestion towards any trading activity.]