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    Morning Report – Friday 17th May




    Pound falls below $1.28 as pressure builds on May to go

    The pound neared a four-month low on Thursday as Britain’s Prime Minister Theresa May battled to keep her Brexit deal, and her premiership, intact amid growing fears of a disorderly departure from the European Union.

    Sterling has weakened more than 1% this month as cross-party Brexit talks have yielded little and left May vulnerable to a leadership challenge. She will set out a timetable for her departure in early June after the latest attempt to get her Brexit deal approved by parliament but could face a confidence vote if the deal is voted down.

    The prospect of May’s demise is weighing on the pound because some investors think it could push Britain in the direction of a disorderly no-deal Brexit. “What we’re seeing is the market pricing in a higher probability of an exit without a deal,” Adam Cole, chief currency strategist at RBC Capital Markets, said, noting the growing risk that the bill would fail to pass and May depart before parliament goes into recess in late-July.

    “It looks increasingly likely she will be replaced by a pro-Brexit PM with no election, and that automatically increases the chances of a no-deal Brexit.”

    Sterling was down for the ninth straight session, touching a three-month low of $1.2794 and slipping 0.2% against the euro to 87.4 pence, the lowest since February 19. May plans to put to her thrice-rejected Brexit agreement to parliamentary vote but Eurosceptics in her party and its Northern Irish allies, as well as opposition Labour lawmakers, are expected to reject it.

    Boris Johnson, Britain’s former foreign minister and a prominent campaigner to leave the EU, said on Thursday he will be standing as a candidate to replace May as Conservative leader, the BBC reported. Britain’s deadline for leaving the EU is Oct. 31 (Reuters).

    China supply worries boost aluminium

    Aluminium prices climbed to two-week highs overnight after news of production shutdowns at one of the country’s biggest smelters fuelled worries about supplies from top producer China.

    Benchmark aluminium on the London Metal Exchange (LME) ended up 0.3 per cent at $US1,860 a tonne. Earlier the metal used widely in transport and construction touched $US1,871, its highest since May 3.

    “Aluminium prices have been lifted by output cuts, due to regulatory, environmental reasons,” said Julius Baer analyst Carsten Menke, adding that the impact on the global market remained to be seen (The Australian).

    Oil prices rise more than 1% as Middle East conflict persists

    Oil futures were up more than 1% on Thursday as tensions in the Middle East grew, with a Saudi-led coalition launching air strikes in retaliation for recent attacks on its crude infrastructure.

    Brent crude futures settled at $72.62 a barrel, up 85 cents, or 1.18%, after touching their highest level in three weeks. U.S. West Texas Intermediate (WTI) crude futures settled at $62.87 a barrel, gaining 81 cents, or 1.37%, after hitting its strongest level in two weeks.

    The Saudi-led military coalition in Yemen carried out several air strikes on the Houthi-held capital Sanaa on Thursday after the Iranian-aligned movement claimed responsibility for drone attacks on two Saudi oil pumping stations earlier in the week (Reuters).


    Below are Trading Central's Intraday preference recommendations. Short (SELL) positions and long (BUY) positions have two targets issued which may be used as take profit levels. Above or below a certain figure indicates the pivot level which may be used as a level for stop loss.
    Oil 30 Minute – Long positions above 62.65 with targets at 63.65 & 64.15.

    This is general advice only and does not take into account your personal circumstances. “It is the Policy of ForexCT to recommend the use of stop/loss function to reduce risk of significant losses to customers.

    EURUSD 30 Minute – Short positions below 1.1190 with targets at 1.1155 & 1.1145.

    GBPNZD 30 Minute – the upside prevails as long as 1.9495 is support.

    WHEAT 30 Minute – The upside prevails as long as 456 is support.

    GBPUSD Daily – Short positions below 1.2820 with targets at 1.2770 & 1.2745.

    USDCHF Daily – Short positions below 1.0225 with targets at 0.9970 & 0.9900.

    SP500 Weekly – Long positions above 2785.00 with targets at 2954.00 & 3025.00

    NASDAQ Weekly – Long positions above 7200.00 with targets at 7842.00 & 8150.00

    This is general advice only and does not take into account your personal circumstances. “It is the Policy of ForexCT to recommend the use of stop/loss function to reduce risk of significant losses to customers.

    Economic Announcements
    (times in AEST)

    Risk Warning

    Trading FX and CFDs involves a substantial degree of risk and should only be undertaken with risk capital. Please consider our PDS and FSG before trading with us. A copy can be found on our website Forex Capital Trading Pty Ltd provides general advice that does not take into account your objectives, financial situation or needs. Investors do not own or have rights to underlying assets. Forex Capital Trading Pty Ltd is regulated by ASIC (AFSL 306400), ABN (69119086270). Forex Capital Trading Pty Ltd’s AFS license and Australian regulation only applies to the financial services being provided in Australia only.

    Posted: May 17, 2019 | 1:29 AM