Sample Category Title

The pair regains traction and probes through converged 100/200SMA's (111.38) following double failure to clearly break below rising 20SMA.

Cracked moving average remains initial support (111.09) and underpins recovery.

Lift above 100/200SMA's is needed to accelerate recovery and improve technical outlook, as daily momentum is flat and lacking stronger support.

Sustained break higher would expose key barriers at 112.13/20 (5 Mar high/Fibo 76.4% of 114.54/104.59 fall) regain of which would signal continuation of recovery from 114.59 (1 Mar spike low).

Caution on failure to close above 100/200SMA which would weaken near-term structure and risk fresh downside.

Res: 111.48, 111.85, 112.13, 112.20
Sup: 111.19, 111.09, 110.78, 110.64

Notes/Observations

• UK PM May said to have won an ‘improved' Brexit deal but it may not be enough for MP; parliament waiting for details to make sure of legal assurances on Irish backstop; meaning vote still scheduled for later today
• UK Jan data in session mixed; Jan GDP and production data beats consensus while trade balances were wider than expectations
• Some risk-on sentiment in global markets as some relief in the Brexit saga overtook growth fears for the time being

Asia:

• Japan Fin Min Aso stated that felt that the BoJ could be somewhat more flexible in defining its price target.

Europe:

• UK Cabinet Office Minister Lidington (de facto Dep PM): PM May had secured legally binding changes that strengthen and improve withdrawal agreement
• UK PM May claimed to have secured legally binding changes to the Brexit deal where the UK could not be trapped in the Irish backstop. PM presented 2 documents, one stating the EU could not trap the UK in the backstop with the other document stating that if they attempted to, the UK could use these actions to lodge a formal dispute through an independent arbitration. Backstop did not predetermine UK future relationship with the EU
• EU Juncker/PM May joint statement: UK committed to finding an alternative arrangement to the backstop by the end of 2020. Agreement provided meaningful clarifications and legal guarantees to the Withdrawal Agreement and clear this was the deal or might not happen at all

Americas:

• Trump administration released $4.7T budget proposal for FY20, +5% higher than FY19 budget. Raised defense spending 4% to $750B; Cut $1.9T to mandatory spending; cuts $845B from Medicare

Macro

• (SK) South Korea: In February foreign investors remained net sellers in the South Korean bond market for second consecutive month selling $190M v the record $3.2B that was sold in January. South Korea is sensitive to global growth. In good times it can be a magnet for speculative capital, which is why foreign investment has poured into the market in recent years. It has the highest level of foreign debt relative to reserves in Asia so is a good barometer for risk appetite. In bad times specs tap those gains to cover losses elsewhere so it pays to monitor these moves to see if they do smooth out.
• (UK) United Kingdom: Reportedly Prime Minister May won some legally-binding concessions on the Irish backstop issue after meeting with EU's Junker and Barnier overnight, which has appeared to have given the Withdrawal Agreement a slightly better chance at today's vote(if it goes ahead), although the Brussels concessions still leaves the UK without the option of unilaterally revoking the Irish backstop. Labour and other opposition parties will still vote against it, so it will depend on Northern Ireland's DUP and how many of the 60+ Brexiteer MPs within the Conservative party vote for it. The newsflow from members of these groups have been mixed, and given the wafer thin majority of the Conservative-DUP government, it's not clear that there will sufficient votes for the deal to pass.

SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM

Equities

• Indices [Stoxx600 +0.90% at 373.92, FTSE -0.22% at 7,115.25, DAX -0.03% at 11,540.37, CAC-40 +0.17% at 5,274.98, IBEX-35 +0.03% at 9,174.30, FTSE MIB -0.21% at 20,594.50, SMI +0.81% at 9,336.20, S&P 500 Futures +0.21%]
• Market Focal Points/Key Themes: European Indices trade mostly flat to higher across the board consolidating gains seen yesterday, with the FTSE 100 underperfoming on continued strength in Cable. US futures edge higher following on from stronger Asian Indices overnight. On the corporate front German Car giant Volkswagen trades fractionally lower following inline results and affirmed outlook. Aryzta trades sharply higher on earnings with Kloeckner another notable gainer following results and upbeat guidance. Other notable gainers include, SHL Telemedicine, Domino's Pizza, Galenica, 888 Holdings and Spie. Meanwhile shares of Uniper declines slightly on earning with G4S, John Menzies, Geberit, Torm and Tamedia among other decliners. In other news Wacker Neuson climbs after the company proposes a special dividend; Mothercare gains on updates to its transformation plan, while Adyen declines after investors to sell €1.5B worth of shares. Looking ahead notable earners include Dick's Sporting good, Del Frisco's restaurants and Roadrunner Transportation among others.

Equities

• Consumer discretionary: Aryzta [ARYN.CH] +12% (earnings), G4S [GFS.UK] -7% (earnings), Domino's Pizza [DOM.UK] +6% (earnings), 888 Holdings [888.UK] +5% (earnings), Pendragon [PDG.UK] -2.5% (earnings), Equiniti [EQN.UK] -12% (earnings)
• Energy: Uniper [UN01.DE] -1.5% (earnings)
• Financials: Close Brothers Group [CBG.UK] +1% (earnings)
• Industrials: Volkswagen [VOW3.DE] -1% (final earnings; discloses regulatory probe), Torm [TORM.DK] -1.5% (earnings), Manz Automation [M5Z.DE] +1% (earnings)
• Technology: WPP [WPP.UK] +0.5% (appointment)

Speakers

• Northern Irish DUP Leader Foster: Did not want to be rushed into decision; sympatric to demands calling for delay in meaningful vote
• Northern Ireland DUP Brexit Spokesman Wilson: Yet to see new Brexit documents; needed to see how legally binding the changes were. PM May's assurances fell short of what she herself promised but will due diligence to what has been said
• Northern Irish DUP party official Donaldson: Had not yet come to a final decision on the new EU-UK agreement; lawmaker were still studying Brexit assurances. Have greater clarity, but we need to hear what the attorney general Cox has to say. What AG Cox says would be very important, but party would make its own decision
• UK MP David Davis (former Brexit Sec): PM May's Brexit deal would be acceptable if Attorney General stated that the assurances had legal force
• UK Tory parliament member Rees-Mogg (Euro-sceptic): Waiting to see what lawyers have to say on PM May's deal; want assurances that UK can leave the backstop. Not sure that EU promises were a major change. Northern Irish DUP party view will heavily influence many lawmakers
• Ireland PM Varadkar: Outcome of recent May/Juncker meeting is positive; assurances are now on legal footing. Brexit agreement did not reopen Withdrawal Agreement or undermine the Irish backstop. Documents complement Withdrawal Agreement. Committed to exploring backstop alternatives; deal did not call into question the backstop
• Austria Chancellor Kurz: EU had taken a step towards Britain to reach a compromise deal on Brexit; move to help PM May get a majority in her parliament
• German Chemical Association VCI: Cut its 2019 Production volumes from +1.5% to -3.5%; Cut its sales forecast from +2.5% to -2.5%. Problem persisted in the Car industry and Brexit process already had impact on investment and trade
• RBA's Debelle stated that was assessing impact of climate change on economy as it presented significant economic risks and opportunities
• IMF maintained South Korea 2019 GDP growth forecast at 2.6%, risks to domestic economy were tilted towards the downside

Currencies/Fixed Income

• The USD was on softer footing in the session against the major European pairs. Some risk on sentiment keeping the greenback on the defensive - The GBP remained in focus ahead of the planned meaningful vote on PM May's Brexit withdrawal deal with the EU. The recent developments have aided the GBP currency in that the pending vote would either pass or fail by a small enough margin to keep the deal alive. Various Tory Brexiteers and Northern Irish officials were awaiting the details of PM May claims to has secured legally binding changes to the Brexit deal where the UK could not be trapped in the Irish backstop. The key factors to watch out for at this time would be UK Attorney General Cox's legal interpretation of the significance of the changes and whether they eased the risk of the backstop becoming permanent. Secondly, the reaction of the DUP party and whether their MPs would support the bill. A plethora of UK data for Jan saw the trade deficit come in wider than expected and knock the GBP currency off its best levels of the session.
• USD/JPY was higher by 0.2% around the 111.50 area as some momentarily relief in the Brexit saga overtook growth fear.

Economic Data

• (SE) Sweden Feb PES Unemployment Rate: 3.7 v 3.7% prior
• (NL) Netherlands Jan Manufacturing Production M/M: +2.8% v -3.3% prior; Y/Y: +0.1% v -3.2% prior; Industrial Sales Y/Y: -7.8% v -1.8% prior
• (FR) France Q4 Total Payroll: 0.2% v 0.1%e; Private Sector Payrolls Q/Q: 0.3% v 0.1%e
• (RO) Romania Feb CPI M/M: 0.8% v 0.4%e; Y/Y: 3.8% v 3.4%e
• (SE) Sweden Feb CPI M/M: 0.7% v 0.8%e; Y/Y: 1.9% v 2.0%e; CPI Level: 331.02 v 331.31e
• (SE) Sweden Feb CPIF M/M: 0.7% v 0.7%e; Y/Y: 1.9% v 2.0%e
• (NO) Norway Jan Region Output Survey (Past 3-months): 1.43 v 1.35e; Output Survey (Past 6-months): 1.46 v 1.44e
• (UK) Jan Visible Trade Balance: -£13.1B v -£12.2Be; Overall Trade Balance: -£3.8B v -£3.5Be; Trade Balance Non EU: -£5.0B v -£3.8Be
• (UK) Jan GDP M/M: 0.5% v 0.2%e; GDP 3M/3M: 0.5% v 0.4% prior
• (UK) Jan Industrial Production M/M: 0.6% v 0.2%e; Y/Y: -0.9% v -1.3%e
• (UK) Jan Manufacturing Production M/M: 0.8% v 0.2%e; Y/Y: -1.1% v -1.9%e
• (UK) Jan Construction Output M/M: 2.8% v 0.8%e; Y/Y: +1.8% v -0.2%e
• (UK) Jan Index of Services M/M: 0.3% v 0.2%e; 3M/3M: 0.5% v 0.5%e

Fixed Income Issuance

• (ID) Indonesia sold total IDR18.5T vs. IDR15.0T target in 3-month and 12-month Bills and 5-year, 10-year,15-year, 20-year and 30-year bonds
• (ZA) South Africa sold total ZAR2.85B vs. ZAR2.85B indicated in 2030, 2035 and 2048 bonds
• (ES) Spain Debt Agency (Tesoro) sold total €1.35B vs. €1.0-2.0B indicated range in 3-month and 9-month

Looking Ahead

• (UK) Parliament holds meaningful vote (likely after 15:00 ET/19:00 GMT)
• (PT) Bank of Portugal Jan ECB financing to Portuguese Banks: No est v €18.7B prior
• (PE) Peru Jan Trade Balance: No est v €1.1B prior (revised from €1.0B)
• 06:00 (US) Feb NFIB Small Business Optimism Index: 102.0e v 101.2 prior
• 06:00 (GR) Greece Feb CPI Y/Y: No est v 0.4% prior; CPI EU Harmonized Y/Y: No est v 0.5% prior
• 06:00 (CY) Cyprus Q4 Final GDP Q/Q: No est v 1.1% prelim; Y/Y: No est v 4.0% prelim
• 06:00 (EU) Daily Euribor Fixing
• 06:00 (IT) Italy Debt Agency (Tesoro) to sell €6.5B in 12-month Bills
• 06:15 (CH) Switzerland to sell 3-month Bills
• 06:30 (UK) Weekly John Lewis LFL Sales data
• 06:30 (EU) ECB allotment in 7-Day Main Refinancing Tender (MRO)
• 06:30 (HU) Hungary Debt Agency (AKK) to sell in 3-month Bills
• 06:30 (BE) Belgium Debt Agency (BDA) to sell €3.4-3.8B in 3-month and 12-month Bills
• 06:30 (UK) BOE allotment in 6-month GBP-enhanced liquidity repo operation (ILTR)
• 06:30 (SL) Slovenia Debt Agency to sell 3-month and 6-month bills
• 06:45 (DE) ECB's Lautenschlaeger (SSM member) in Basel
• 07:00 (IL) Israel Feb Consumer Confidence: No est v 122 prior
• 07:00 (BR) Brazil Mar IGP-M Inflation (1st Preview): 1.0%e v 0.2% prior
• 07:00 (PT) Portugal Jan Trade Balance: No est v -€1.6B prior
• 07:00 (PT) Portugal Feb Final CPI M/M: No est v -0.2% prelim; Y/Y: No est v 0.9% prelim
• 07:00 (PT) Portugal Feb Final CPI EU Harmonized M/M: No est v -0.3% prelim; Y/Y: No est v 0.9% prelim
• 07:45 (US) Weekly Chain Store Sales data
• 07:45 (US) Daily Libor Fixing
• 08:00 (IN) India Feb CPI Y/Y: 2.4%e v 2.1% prior
• 08:00 (IN) India Industrial Production Y/Y: 2.0%e v 2.4% prior
• 08:00 (BR) Brazil Feb IBGE Inflation IPCA M/M: 0.4%e v 0.3% prior; Y/Y: 3.8%e v 3.8% prior
• 08:00 (BR) Brazil CONAB Crop report
• 08:30 (US) Feb CPI M/M: 0.2%e v 0.0% prior; Y/Y: 1.6%e v 1.6% prior
• 08:30 (US) Feb CPI (Ex-Food/Energy) M/M: 0.2%e v 0.2% prior; Y/Y: 2.2%e v 2.2% prior
• 08:30 (US) Feb CPI Index NSA: 252.812e v 251.712 prior; CPI Core Index SA: 261.165e v 260.701 prior
• 08:30 (US) Feb Real Avg Weekly Earnings Y/Y: No est v 1.9% prior; Real Avg Hourly Earning Y/Y: No est v 1.7% prior
• 08:30 (DE) German Chancellor Merkel with Belgium PM Michel
• 08:55 (US) Weekly Redbook Retail Sales data
• 09:00 (UK) Baltic Dry Bulk Index
• 09:00 (RU) Russia announces upcoming OFZ Bond issuance
• 10:00 (EU) Weekly ECB Forex Reserves
• 13:00 (US) Treasury to sell 10-Year Notes Reopening
• 15:00 (AR) Argentina Jan Capacity Utilization: No est v 56.6% prior
• 16:30 (US) Weekly API Oil Inventory data

The US dollar weakened against a basket of major currencies despite the publication of positive economic data from the US. Thus, the core retail sales index rose by 0.9% in January, while experts expected growth by only 0.4%. Retail sales also increased by 0.2% in January, although experts did not expect growth. The dollar index (#DX) closed the trading session in the negative zone (-0.10%).

Investors are focused on Brexit. Today, the House of Commons of the UK should again start voting for the Brexit agreement, presented by Prime Minister, Theresa May. During the first vote, the Parliament rejected the Prime Minister's deal. If the revote again fails, the events may develop in two scenarios: the UK will leave the EU without an agreement, or the Brexit date will be rescheduled. Yesterday, Theresa May also succeeded to agree with the European Commission President, Jean-Claude Juncker, on a legally binding instrument on the backstop – a backup insurance plan for the border between Ireland and Northern Ireland.

The "black gold" prices continue to rise. At the moment, futures for the WTI crude oil have approached $57.10 per barrel. At 22:30 (GMT+2:00), the API weekly crude oil stock will be published.

Market Indicators

• Yesterday, aggressive purchases were observed in the US stock market: #SPY (+1.45%), #DIA (+0.80%), #QQQ (+2.08%).
• At the moment, the 10-year US government bonds yield is at 2.66-2.67%.

The news feed on 12.03.2019:

• UK GDP data at 11:30 (GMT+2:00);
• Manufacturing production in the UK at 11:30 (GMT+2:00);
• Report on inflation in the US at 14:30 (GMT+2:00).

The EUR/USD currency pair

Technical indicators of the currency pair:

Prev Open: 1.12342
Open: 1.12474
% chg. over the last day: +0.25
Day's range: 1.12473 – 1.12739
52 wk range: 1.1214 – 1.2557

EUR keeps recovering after the sharp fall last week. The EUR/USD quotes are testing the local resistance at 1.12700. 1.12450 acts as a mirror support. At the same time, EUR remains under pressure due to weak economic reports from the EU, as well a growing spread between Germany and US government bonds yields. Soon EUR/USD may start descending again. Right now the investors are looking at the UK Parliament and the Brexit vote. You should open positions from the key levels.

At 14:30 (GMT+2:00) the US will publish an inflation report.

The indicators do not provide precise signals, the price fixed between 50 MA and 200 MA.

The MACD histogram is in the positive zone and keeps rising which points toward the further correction.

The Stochastic Oscillator is in the neutral zone, the %K line is above the %D line which points toward a bullish mood.

Trading recommendations

Support levels: 1.12450, 1.12200, 1.11800
Resistance levels: 1.12700, 1.12900, 1.13200

If the price fixes above 1.12700, expect the quotes to recover toward 1.13000-1.13200.

Alternatively, the quotes can descend toward 1.12200-1.12000.

The GBP/USD currency pair

Technical indicators of the currency pair:

Prev Open: 1.29668
Open: 1.31890
% chg. over the last day: +2.00
Day's range: 1.31885 – 1.32871
52 wk range: 1.2438 – 1.4378

GBP/USD had an aggressive sell-off yesterday. The pound added 250 points against the USD. Theresa May finalized the negotiations with Jean-Claud Yunker regarding the backstop instrument. Today the attention is focused on the vote in the UK Parliament regarding the new Brexit agreement. The exact time of the vote is unknown. You should keep an eye on this event. The GBP/USD quotes are consolidating around 1.31850-1.32500. You should open positions from these levels.

The Economic News Feed for 12.03.2019:

GDP report (UK) – 11:30 (GMT+2:00);

Industrial Production Volume (UK) – 11:30 (GMT+2:00);

The price fixed above 50 MA and 200 MA which points to the power of the buyers.

The MACD histogram is in the positive zone but below the signal line, which gives a weak signal to buy GBP/USD.

The Stochastic Oscillator is in the neutral zone, the %K line is above the %D line, which points toward a bullish mood.

Trading recommendations

Support levels: 1.31850, 1.31100, 1.30700
Resistance levels: 1.32500, 1.33000

If the price fixes above the resistance level of 1.32500, expect the quotes to grow toward 1.33000-1.33500.

Alternatively, the quotes can fall toward 1.31200-1.30700.

The USD/CAD currency pair

Technical indicators of the currency pair:

Prev Open: 1.34148
Open: 1.33944
% chg. over the last day: -0.18
Day's range: 1.33853 – 1.34060
52 wk range: 1.2248 – 1.3664

USD/CAD keeps trading in a flat. There is no single defined trend. Right now the local support and resistance levels are 1.33850 and 1.34200. A technical correction for CAD is possible soon. Keep an eye on the US inflation report and the oil quotes dynamics. You should open positions from the key levels.

The Economic News Feed for 12.03.2019 is calm.

The indicators do not provide precise data, the price fixed between 50 MA and 200 MA.

The MACD histogram is in the negative zone but above the signal line, which gives a weak signal to sell USD/CAD.

The Stochastic Oscillator is in the neutral zone, the %K line is crossing the %D line. There are no signals at the moment.

Trading recommendations

Support levels: 1.33850, 1.33350, 1.33000
Resistance levels: 1.34200, 1.34600, 1.35000

If the price fixes below 1.33850, expect the quotes to correct toward 1.33400-1.33200.

Alternatively, the quotes can grow toward 1.34600-1.34800.

The USD/JPY currency pair

Technical indicators of the currency pair:

Prev Open: 111.003
Open: 111.205
% chg. over the last day: +0.23
Day's range: 111.193 – 111.464
52 wk range: 104.56 – 114.56

USD/JPY has an ambiguous picture. Right now the quotes are consolidating, with local support and resistance being 111.200 and 111.500. The demand for safe haven assets grows before the Brexit vote. The investors are waiting for the US inflatio report. You should open positions from the key levels.

The Economic News Feed for 12.03.2019 is calm.

The indicators do not provide precise signals, the price fixed between 50 MA and 200 MA

The MACD histogram is in the positive zone and keeps rising which points toward a bullish mood.

The Stochastic Oscillator is in the neutral zone, the %K line is above the %D line which points toward the growth of USD/JPY.

Trading recommendations

Support levels: 111.200, 110.900, 110.600
Resistance levels: 111.500, 111.800, 112.000

If the price fixes below 111.200, expect the quotes to fall toward 110.900-110.700.

Alternatively, the quotes can grow toward 111.800-112.000.

EUR/USD

Current level - 1.1256

The upmove since 1.1175 low is still on track, currently testing 1.1280 hurdle. A reversal here will be confirmed with a break through 1.1220 trigger and will allow a slide towards 1.1090.

USD/JPY

Current level - 111.29

The resistance at 111.50 is still intact and I favor a reversal, for a downswing towards 111.00, en route to 110.20.

GBP/USD

Current level - 1.3204

The impulsive rise through 1.3100 area shows a completion of the corrective slide since 1.3350 high and the outlook is positive, for a test of the mentioned peak, en route to 1.3450. Minor intraday support lies at 1.3180.

The pound rose rallied yesterday and during today's Asian session, as UK's Theresa May and EU Commission President Juncker announced that they struck an improved deal about the Irish backstop. Late yesterday evening, May and Juncker announced three documents which aim to address the Irish backstop issue. Despite the changes not being quite clear yet, it seems that the revised deal may include some form of legally binding assurances for the temporary nature of the Irish backstop. The document is expected to be scrutinized ahead of the UK parliament's sitting and the UK Attorney General still has to endorse the deal. The main political development for today's vote is that Theresa May could have an actual chance to pass her new deal through the UK Parliament, should there be substantial changes. It would be characteristic that EU commission president Juncker stated that the choice is between this deal and reversing Brexit. Cable rallied yesterday breaking all of our resistance lines and landing above the 1.3175 (S1) resistance line (now turned to support). We expect to see more volatility (either direction) for the pair as both currencies are expected to have increased volatility today, yet the main event for the day is expected to be the UK parliament's vote tonight. We could see the pair reversing direction or moving even higher depending on the outcome of the vote. Also the pair may prove sensitive to any announcements during the day about Brexit. Should the pair find fresh buying orders along its path, we could see it breaking the 1.3265 (R1) resistance line and aim for higher grounds. On the other hand should the pair come under the selling interest of the market, we could see it breaking the 1.3175 (S1) and aim if not break the 1.3070 (S2) support line. Please be advised once again that should Theresa May's new Brexit deal be approved by the UK parliament, we could see the pound rallying at very high levels as it could once again break all of our resistance lines. If the UK parliament rejects the deal, we expect the pound to weaken substantially, yet the market may remain in anticipation of the next vote on Wednesday.

USD remains rather steady at modest growth of US retail sales

The USD remained rather steady yesterday as a modest growth of the US retail sales growth rate was released for January. Analysts point out that risk sentiment seems to be back on and may weaken the USD somewhat in the coming sessions. It was characteristic that the dollar index was down by 0.2%, as investor's preferred riskier assets yesterday. Should the current mood be maintained, we could see the USD starting to weaken, yet today's financial releases could be of the essence. EUR/USD rose yesterday testing the 1.1260 (R1) resistance line. Should the upward trendline incepted since the 8th of March be maintained, we could see the pair continue to trade in a bullish market, should it clearly break it, we could see the pair maintaining a sideways movement. We expect the pair to be fundamentally influenced by today's financial releases, as well as the UK Parliament's vote tonight. Should the bulls maintain control of the pair's direction, we could see the pair breaking the 1.1260 (R1) resistance line and aim for the 1.1300 (R2) resistance barrier. Should on the other hand the bears take over, we could see the pair breaking the 1.1215 (S1) support line and aim for lower grounds.

Today's other economic highlights

In today's European session we get Sweden's CPI rate for February, UK's GDP growth rate for January and UK's manufacturing output for January. In the American session, we get the US CPI rates for February and in tomorrow's Asian session, we get Japan's corporate goods prices for February and Japan's machinery orders growth rate for January. Also please be advised that Fed's Lael Brainard speaks today.

GBP/USD

Support: 1.3175 (S1), 1.3070 (S2), 1.2960 (S3)
Resistance: 1.3265 (R1), 1.3350 (R2), 1.3450 (R3)

EUR/USD H4

Support: 1.1215 (S1), 1.1165 (S2), 1.1125 (S3)
Resistance: 1.1260 (R1), 1.1300 (R2), 1.1340 (R3)

The Euro holds in green for the third straight day and extends recovery from 1.1176 low (7 Mar) through pivotal double-Fibo barrier at 1.1270 (38.2 of 1.1419/1.1176 / 23.6% of 1.1570/1.1176).

Renewed Brexit optimism positively impacted the single currency, as the dollar remains at the back foot after downbeat US NFP figures, with mild reaction on better than expected US retail sales data on Monday.

Rising daily momentum (though still in the negative territory) and north-heading RSI which also formed bull-cross, under pin recovery.

Bulls eye strong resistance zone between 1.1300 and 1.1326, consisting of 10SMA (1.1300), 20SMA (1.1312) and double-Fibo barrier at 1.1326 (38.2% of 1.1569/1.1176 / 61.8% of 1.1419/1.1176) where recovery may show signs of stall.

Failure to clear these barriers will keep larger bears in play and shift focus lower on return and close below falling 5SMA (1.1252).

Conversely, sustained break above 1.1326 would generate strong bullish signal for recovery extension towards 1.1368/71 (converged 55/100SMA’s), possibly for renewed probe above 1.14 barrier.

Res: 1.1300, 1.1312, 1.1326, 1.1336
Sup: 1.1270, 1.1252, 1.1234, 1.1186

Brexit optimism pushed cable over 1.1 percent in overnight trading. Today, the pound may face historic volatile session and the fact is that this volatility for the currency may continue for the next few days. This is because of the Brexit vote sequence set by the British prime minister, Theresa May. It is likely that she may face another humiliating defeat in the parliament today. The pound's one-month volatility has jumped above 12 percent but it is still well below the historic high which the currency experienced back in November When Theresa May faced a tragic death for her deal.

Another Trick In May' Book

Theresa May, the British Prime Minister secured a deal last night. She flew to Strasbourg, France, last night to finalize negotiations with European Commission President Jean-Claude Juncker. She is convinced that the new wording will convince the lawmakers in the U.K. parliament. The European Commission President Jean Claude Juncker has made it clear “it is this deal or Brexit may not happen at all."

According to her, the “legally binding” changes meet the requirement of the parliament about the Irish backstop and she is confident that the MPs would support her deal. This is one of another trick by the prime minister. She has put the parliament members under more pressure. They only have a few hours to review the deal.

Whose Opinion Matters The Most

Will she survive? By looking at her track record, it becomes clear that she is doomed to fail. With every hour passing, we are likely to get new news on Brexit from the lawmakers. It is the opinion of the Attorney General Geoffrey Cox which matters the most today. If he thinks that the current deal isn't going to lock the U.K. indefinitely in the Irish backstop, the chances are that the prime minister may be able to secure a last minute deal. However, one needs to be really optimistic to think of such an outcome.

Remain Side Still Control The power

This is because there is still enough headwind from the remain side who dislike this deal altogether and they are likely to vote down this deal in a hope to stop the divorce process altogether- a more sensible approach. Labour's leader Jeremy Corbyn has already said that he is going to vote against the deal. The critical element from here is that how the DUP and Tory Euroskeptics will vote. Theresa May needs nearly 116 votes to flip in favor.

How Big The Move Could Be?

The question on everyone's mind is how high or low the currency will go on the back of the historic vote in the UK's parliament today? Well, the fact is that Sterling is the best performing currency year-to-date and it is highly likely that the pound may revisit the same trading range which it did during the referendum era- back in 2016.

The likelihood for today's move is between 5 to 10 percent on the Brexit vote. The currency may slide as much as 4 percent if the lawmakers do not back the deal in the parliament today. The drop could be even steeper if the odds of no deal Brexit becomes more prominent, this could push the currency lower against the dollar by over 10 percent. On the flip side, if Thersa May's luck's shine today and the deal passes through the parliament, we could see the sterling rising by another 3 to 4 percent.

UK GDP grew strongly by 0.5% in January, well above expectation of 0.2% mom. Services rose 0.3%, production rose 0.6%, manufacturing rose 0.8% and construction jumped 2.8%. Though, agriculture dropped -1.3%. Rolling three-month growth was unchanged at 0.2% qoq.

ONS Head of GDP Rob Kent-Smith said: "Across the latest three months, growth remained weak with falls in manufacture of metal products, cars and construction repair work all dampening economic growth. These were offset by strong performances in wholesale, IT and health services. This sluggish growth came despite the economy bouncing back from a weak December."

Full release here.

Also from UK, visible trade deficit widened to GBP -13.1B in January. Industrial production rose 0.6% mom, -0.9% yoy versus expectation of 0.2% mom, -1.3% yoy. Manufacturing production rose 0.8% mom, -1.1% yoy versus expectation o f0.2% mom, -1.9% yoy.

Irish Prime Minister Leo Varadkar hailed that the agreement between UK PM May and EU Juncker was positive. He added that I" hope and trust the withdrawal agreement will now be endorsed by the House of Commons."

He noted that the "documents are complementary to the withdrawal agreement and political declaration and aim to provide an additional layer of interpretation, clarification and elaboration to the United Kingdom ahead of a further vote in Westminster ..."

And, the "instrument agreed yesterday puts those assurances on a legal footing and represents an unambiguous statement by both parties of what has been agreed." At the same time "it does not re open the withdrawal agreement or undermine the backstop or its application."