Labour's McDonnell: Government hasn't moved on customs union

It doesn't look like Brexit talks are going anywhere still

  • There hasn't been sufficient discussion of alignment with single market in talks

  • Government hasn't shown any changes in language yet on customs union

  • Customs union will be the first item on today's agenda

  • Second referendum is also on the agenda

I won't hold my breath on any major breakthrough in today's talks as well. The more important aspect of today's Brexit episode will be May's visit to Berlin and Paris.



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AUD/USD continues to creep higher, nears 0.7150 as the aussie holds firm

AUD/USD reaches its highest level since 21 March

AUD/USD H1 09-04

The high today is at 0.7149 as the aussie continues to stay buoyed with traders citing exporter demand for hedging requirements being one of the reasons boosting the commodity currency today. But technically, price contended with a break of the 0.7130 level yesterday and finally found it today with buyers staying in near-term control.

That is continuing to give a further lift to the pair as price now closes in on the 0.7150 level. But as mentioned earlier, the daily chart is where all the focus should be on:

AUD/USD D1 09-04

The pair is looking to challenge a break above the 100-day MA (red line) and the topside resistance at 0.7142 and 0.7143 respectively. Those will be key levels to watch out for ahead of the daily close later.

If buyers manage that, it will help to give confidence for a possible breakout to the upside over the next few sessions. Risk sentiment is still looking rather cautious for the time being, but the lack of fresh direction in markets is helping to allow the aussie to quietly gain.



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EUR/USD buyers quietly looking for an upside extension

EUR/USD trades to a session high of 1.1245

EUR/USD H1 08-04

Buyers are surreptitiously establishing a more bullish near-term bias by holding above the key hourly moving averages and are now looking to push towards a test of the 1.1250 level. Last week's high of 1.1255 will also be a key resistance region to look at alongside decent-sized expiries today rolling off at the 1.1260 level.

There isn't much headlines to really provide traders with fresh direction on the day. Equities remain mixed and slightly more cautious while bond yields are also neither going anywhere so far in the European morning.

This has the makings of a technical retracement from the move two weeks ago but just be aware that we'll still have the ECB meeting on Wednesday and that remains the major risk event for the euro this week.



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EUR/USD buyers quietly looking for an upside extension

EUR/USD trades to a session high of 1.1245

EUR/USD H1 08-04

Buyers are surreptitiously establishing a more bullish near-term bias by holding above the key hourly moving averages and are now looking to push towards a test of the 1.1250 level. Last week's high of 1.1255 will also be a key resistance region to look at alongside decent-sized expiries today rolling off at the 1.1260 level.

There isn't much headlines to really provide traders with fresh direction on the day. Equities remain mixed and slightly more cautious while bond yields are also neither going anywhere so far in the European morning.

This has the makings of a technical retracement from the move two weeks ago but just be aware that we'll still have the ECB meeting on Wednesday and that remains the major risk event for the euro this week.



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EUR/USD not in a hurry to go anywhere to start the new week

Price continues to hug the key hourly moving averages

EUR/USD H1 08-04

Buyers and sellers are continuing to battle it out around the 100 and 200-hour moving averages (red and blue lines respectively) to start the new week. Friday's US jobs report failed to offer anything too new to traders and that leaves the near-term bias in EUR/USD still relatively undefined for the time being.

From a technical perspective, near-term resistance is seen closer to 1.1245-50 while support/bids are lined up at the 1.1200 handle with further support seen at 1.1184 from the 2 April low (daily resistance at 1.1187 also still at play here).

Adding to the lack of excitement for traders today is that there are large expiries rolling off at 1.1225, which looks set to limit price action on the day given that risk is also struggling for direction after turning from being more optimistic to being more cautious now.

That and the near-term levels above should keep EUR/USD still trapped within the 1.1200-50 range to begin the week, until the next catalyst comes along to break the mold.



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Cable turns flat on the day as sellers maintain near-term control

GBP/USD pares earlier gains and moves back to unchanged levels today

GBP/USD H1 05-04

The pound is failing to see much upside as May offers to delay Brexit until 30 June in a letter to European Council president, Donald Tusk, this morning. Cable rose earlier in the day to a high of 1.3123 after Tusk was reported to offer a year-long extension but price ran into resistance from the 100 and 200-hour MAs, where it got rejected.

That indicates that sellers are still in near-term control of the pair as price failed to break above the key resistance levels and have now moved back below the 1.3100 handle.

The issue with May requesting a 30 June extension is that it really is neither here nor there. If the UK fails to ratify a Brexit deal before 23 May, then they would have to participate in the European Parliament elections - which means that Brexit can be extended well beyond that if need be.

It is a move that is politically motivated because of the position she is in but it doesn't help the UK all too much should the EU only allow for an extension up until next year instead. What that means is that May has to go back to parliament to discuss if that option is viable - since parliament will not accept a no-deal on 12 April - but if time runs out before they can implement the extension, the UK risks invoking an 'accidental no-deal Brexit'.

That is something to consider in the calculations for the time being. Looking at how things are going, the EU seems to be leaning towards either offering a long extension or no extension at all. This makes May's 30 June request seem a bit redundant but I guess she doesn't have the cards to play for a longer request.

Whatever the case is, I reckon there could be more twists and turns along the way over the weekend. But for now, the immediate focus for cable will be the US jobs report later. Let's take things one step at a time, shall we?



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AUD/USD still trapped around familiar levels ahead of US NFP release

Topside remains limited by near-term resistance around 0.7130

AUD/USD H1 05-04

The aussie is the best performing major currency on the day so far but that doesn't tell the whole story. AUD/USD trades in just a 21 pips range as currencies are basically in a lull awaiting the US NFP release later today.

The high for AUD/USD touched 0.7129 earlier and that once again fails to break above resistance around 0.7129-32 set out earlier in the week. Meanwhile, option-related bids (A$1.7 billion of expiries) are expected to keep the pair afloat above the 0.7100 handle until we get the results of the US jobs report.

For any upside surprises (poor US data) for AUD/USD from the release later, be wary of the 100-day MA at 0.7145 and the 200-day MA at 0.7200. Those will be key levels to watch out for in terms of any further extension higher in the pair.



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Trade ideas thread - European session 5 April 2019

Daily thread to exchange ideas and to share your thoughts

WCRS 05-04

Happy Friday, everyone! Hope you're all doing well as we get into the session and also prepare for the US non-farm payrolls release later on in the day. Markets are somewhat steady ahead of the data but the pound is seeing slight gains after a BBC report says that Tusk is going to offer the UK a 12-month Brexit extension next week.

Meanwhile, the aussie is also upbeat after Chinese president Xi said that trade talks with the US is making substantial progress. But it remains the only risk asset that is really moving on the day. AUD/USD gains remain limited by near-term resistance at 0.7130 currently though.


Overall risk sentiment is more subdued but bond yields are inching a tad higher with US 10-year yields briefly touching a two-week high earlier just above 2.53%.

All eyes are on the US jobs report later today so I would expect a quiet session in the European morning. Markets will be looking at the headline print to see if it is an indication of a potential downfall in the US economy (after last month's disappointing print), so just be wary of that.

What are your views on the market right now? Share your thoughts/ideas with the ForexLive community here.



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USD/JPY still making up its mind as bond yields are slightly weaker on the day

USD/JPY hovers just under the 200-day moving average still

USD/JPY D1 04-04

With risk sentiment looking a bit heavy and sluggish today, there isn't much movement in yen pairs so far in the European morning. USD/JPY holds in a 18 pips range but sits slightly on the lower side at the moment with Treasury yields a little weaker currently. 10-year yields are down by 2.3 bps to 2.50% as risk sentiment remains rather mixed/muted since Asian trading.

I reckon it could be a case of markets starting to prepare for the US jobs report tomorrow and we may very well have to sit in a bit of a lull until then. That said, Trump is meeting with Chinese vice premier Liu He later today so just be wary of potential headlines there that could potentially give risk trades a bit of a nudge in the session ahead.

Otherwise, large expiries rolling off at 111.50 today and the 200-day MA (blue line) @ 111.49 should help to limit any upside break and prevent the bias/momentum in USD/JPY from shifting to be more bullish - without any notable headlines to support it.

Downside support is seen at 111.25 (100-hour MA) before bids at the 111.00 handle come into play as well as the 100-day MA (red line) at 110.96.



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EUR/USD buyers in search of near-term break, large expiries something to consider

EUR/USD continues to knock on the door of the 200-hour moving average

EUR/USD H1 04-04

But so far, sellers are prevailing at the key near-term level in preventing the bias from turning more bullish. As the market focus starts turning towards the US jobs report tomorrow, price action could very well just center around levels between the two key hourly moving averages (red and blue lines).

The other thing to consider is that there is going to be large expiries rolling off at the 1.1250 level today (€1.3 billion) and tomorrow (€2.1 billion) for the pair. Unless risk sentiment starts to turn more optimistic or sour in a significant manner, I would expect option-related offers to keep price action limited near current levels.

Other than that, there isn't much on the economic calendar to move things along (the dip in German factory orders is well-documented in the PMI surveys already). So, if risk continues to be indecisive, the pair should range between the 1.1200 and 1.1250 levels ahead of the NFP release tomorrow.



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