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The British pound has risen sharply higher against the US dollar as speculation continues to grow that the UK will delay its departure from the European Union. The GBPUSD pair has a strong intraday bullish bias while trading above the 1.3095 level and may soon target the 1.3200 resistance area. Traders should note the four-hour time frame shows the potential formation of a bullish inverted head and shoulders pattern, with a strong upside projection.

The GBPUSD pair has a strongly bullish bias while trading above the 1.3095 level, key technical resistance is found at the 1.3160 and 1.3200 levels

If the GBPUSD pair trades below the 1.3095 level, sellers may test towards the 1.3050 and 1.3000 support levels.

Last week, the price of cryptocurrencies rose after it emerged that JP Morgan was in the process of launching its own stablecoin. The coin will be used for international remittances to simplify and reduce the duration it takes for funds to reach their destination. This will be the first large-scale application of the blockchain technology by a major US bank.

Progress in the blockchain industry continued yesterday after a report showed that more oil companies had signed for the Vakt platform. A report by Financial Times said that companies responsible for two thirds of all deals in the North Sea crude had signed to the platform, which is backed by a group of oil majors and trading houses. The goal for the London-based platform is to digitize the paper-backed processing of physical trade using blockchain technology. It will launch officially in the coming week at the International Petroleum Week. The companies that have signed up include BP, Shell and Total. Traders like Gunvor and Mercuria have signed up too. When fully-implemented, the platform will help reduce the long and tedious process of oil trading that currently include paper-based contracts, invoices, and letters of credit that are exchanged by mail and fax.

In addition to the oil-based blockchain project, other large traders are considering launching their own platform. These include those in the agricultural sector such as Archer Daniels Midland, Bunge, Cargill, and Louis Dreyfus Company. These companies are being forced to explore cost-cutting procedures as it becomes increasingly difficult to make money in the commodities industry.

Meanwhile, Warren Buffet trashed Bitcoin in an interview with CNBC yesterday. After releasing his annual letter, he said that while he believes in blockchain, he believed that Bitcoin was an illusion that attracts charlatans. This statement led the price of Bitcoin to decline because Buffet is one of the most respected investors of our lifetime.

The price of Bitcoin declined to a low of $3715. On the four-hour chart, the price is along the 42-day and 21-day EMAs. The RSI has dropped to a low of 46. There is a likelihood that the price will continue to move to the previous high of above $3800.

Sterling rose in overnight trading after Labor leader Jeremy Corbyn said that the party will back a new referendum to 'prevent a damaging Tory Brexit'. This raised the chances that there will be a second referendum on the future of the UK's relationship with the European Union. Senior Labor leaders also announced that they would back a second referendum and aggressively campaign for remaining in the EU. However, there is still a very limited possibility that there will be another vote. In fact, the prospects of another referendum could put pressure on conservative euro-sceptic MPs to support Theresa May's deal.

The price of crude oil declined after Donald Trump moved to intervene. Yesterday, he sent a tweet, asking OPEC members to ease the supply cuts with the goal of pushing the price lower. This led to a 3% decline in the price of crude. However, there is a likelihood that OPEC and Russia will not heed caution from the US President. In fact, according to a report by Wall Street Journal, OPEC officials have hinted that they will maintain the cuts when they meet in April.

The price of gold remained relatively stable in overnight trading even as a 'war' among its producers intensified. Yesterday, Barrick Gold announced an unsolicited offer to buy rival Newmont mining for more than $8 billion. This comes a few weeks after Newmont announced that it will buy rival Goldcorp for more than $10 billion. Barrick's offer to Newmont offered no premium, which is a sign that Newmont will not agree to it. The industry is facing a challenge of increasing capex and reduced output.

EUR/USD

The EUR/USD pair reached a low of 1.1233 on 15th February. The pair then started a slow upward climb and yesterday, it reached a high of 1.1367. On the four-hour chart, the pair's price is above the 21-day and 42-day EMAs while the signal line of the MACD has flattened above the neutral line. All this is happening in a low-volume environment. There is a likelihood that the price will hold steady ahead of Jerome Powell's testimony to congress today.

GBP/USD

The GBP/USD pair rose after the Labor party announced that it would support a second referendum. The pair reached a high of 1.3147. On the four-hour chart, this level is above all the short and medium-term moving averages while the RSI has moved to above the 70 level. The pair will likely continue moving up, with the next resistance level expected to be at 1.3220. This pair will also likely be affected by the Jerome Powell testimony to congress.

XTI/USD

The price of WTI crude oil declined to a low of $55 after Trump's pressure on OPEC. On the hourly chart, the price is slightly close to the 61.8% Fibonacci Retracement level. As the pair's price dropped yesterday, the short and medium-term moving averages had a crossover, which is a signal that the declines could continue. However, there is also a possibility that traders will start thinking about Trump's statement and the fact that OPEC will not increase production. This could see the pair resume the upward trend.

Daily Pivots: (S1) 125.57; (P) 125.94; (R1) 126.50; More....

EUR/JPY edged higher to 126.30 but failed to sustain above 125.95 resistance. Intraday bias stays neutral first. On the downside, break of 124.23 support will suggest completion of rebound from 118.62 after rejection by 55 day EMA. Deeper fall would then be seen back to retest 118.62 low. However, decisive break of 126.30 will dampen our bearish view and target 129.25 resistance next.

In the bigger picture, medium term rebound from 109.03 (2016 low) has completed at 137.49 (2018 high) already, with corrective structure. Fall from 137.49 is likely still in progress. Decisive break of 118.62 will target 161.8% projection of 137.49 to 124.61 from 133.12 at 112.28, which is inside 109.03/114.84 support zone. This will remain the favored case as long as 129.25 resistance holds.

GBPUSD is looking more bullish in the short-term as prices have climbed towards the 38.2% Fibonacci retracement level of the downleg from 1.4375 to 1.2390 around 1.3145. In addition, the price is recording a new one-month high after the climb above the 20- and 40-simple moving averages (SMAs) in the daily timeframe.

The positive bias is also supported by the RSI indicator, which has been hovering above the 50-neutral level in the past few days, while the MACD oscillator crossed above the trigger line and is strengthening its momentum, confirming the recent upside move in price action.

Should the pair manage to strengthen its positive movement, the next resistance could come around the three-and-a-half-month high of 1.3217, registered on January 25. A break above this level would challenge the 1.3300 strong psychological barrier, taken from the highs on September 20, while a jump even higher would shift the bias to a more bullish one and open the way towards the 50.0% Fibonacci of 1.3380.

However, if prices are unable to break the 38.2% Fibonacci in the next few sessions, the risk would switch to the downside, with the 20- and 40-SMAs coming into focus currently at 1.2985 and 1.2935 respectively. Below these lines, the next key support to watch lower down is the 23.6% Fibonacci of 1.2855.

In the medium-term picture, cable remains neutral within the 1.3300-1.2390 boundaries and only a significant move above the 1.3300 handle would endorse the current positive view.

Daily Pivots: (S1) 143.92; (P) 144.33; (R1) 144.89; More...

GBP/JPY's rally resumed after brief retreat and reaches as high as 145.97 so far. Intraday bias is back on the upside for further rally. But we'd expect strong resistance from trend line (now at 146.75) to limit upside, at least on first attempt. On the downside, break of 143.78 minor support will turn bias to the downside for 141.00 support. However, sustained break of the trend line will target 149.48 resistance next.

In the bigger picture, the strong rebound from 131.51 suggests that medium term fall from 156.59 (2018 high) has completed already. The corrective structure of such decline is turn argues that it's the second leg of the corrective pattern from 122.36 (2016 low). And this pattern is starting the third leg. On the upside, decisive break of 149.48 will pave the way to 156.59 resistance and above.

Daily Pivots: (S1) 0.8657; (P) 0.8679; (R1) 0.8696; More...

EUR/GBP's fall fro 0.8840 resumed after brief consolidation and reaches as low as 0.8629 so far. Intraday bias is back on the downside for 0.8617/20 key support zone. Decisive break there will resume larger decline from 0.9305. On the upside, above 0.8728 minor resistance will turn bias to the upside for 0.8840 resistance instead.

In the bigger picture, EUR/GBP is seen as staying in long term range pattern started at 0.9304 (2016 high). On the downside, decisive break of 0.8620 support will resume the falling leg from 0.9305 (2017 high) to 100% projection of 0.9305 to 0.8620 from 0.9101 at 0.8416. In that case, we'd expect strong support around 0.8312 to contain downside and bring rebound.

General Trend:

• Shanghai Composite rises in early trading as IT and property shares gain
• Chinese telecom services and brokerage firms pullback from Monday's gains
• Apple supplier AAC Technologies declines over 12% in Hong Kong, issued profit warning
• Standard Chartered now targeting tangible ROE of at least 10%, raises dividend
• Japanese equities weighed down by Electric Appliance, Machinery and Financial companies
• Consumer Discretionary, Resources and Financial shares weigh on Australian market
• China NDRC: New construction starts may fall, manufacturing investment may face some downward pressure in H1
• Korean Won (KRW) declines, upcoming US/North Korea summit in focus (Feb 27th-28th)
• Indian Rupee (INR) weighed down by geopolitical concerns related to Pakistan
• British pound (GBP) rises in Asian trading , PM May speculated to propose to formally rule out a ‘no-deal' Brexit (UK Press)
• Fed Chair Powell due to give Congressional testimony on Feb 26-27th (Tuesday-Wed), Tuesday's testimony before the Senate expected to begin at 10 am EST
• Australia Q4 construction work done data due for release on Wednesday (Feb 27th)

Headlines/Economic Data

Japan

• Nikkei 225 opened +0.1%
• 9201.JP Expects FY19 net -17% y/y at ¥114B, Op Net -3% y/y at ¥170B; To apply for a budget carrier license in March, service to start next year – Nikkei
• (JP) Japan Fin Min Aso: Corporate cash should be spent on R&D or shareholders
• (JP) Bank of Japan Gov Kuroda (BOJ): China economy has been slowing down, and very significantly since second half of 2018
• 4589.JP Rises by over 25% after Nikkei reports plans to raise prices on agricultural equipment sold in the US
• (JP) Bank of Japan (BOJ) Jan Core CPI Y/Y: 0.5% v 0.4% prior

Korea

• Kospi opens -0.1%
• (KR) US and North Korea remain apart on an agreement over extent of nuclear inspections - Korean press
• (KR) US White House: Trump to have initial meeting with North Korea Kim on Wed evening in Vietnam, 'follow-ups' are expected on Thursday
• (KR) South Korea Feb Consumer Confidence: 99.5 v 97.5 prior

China/Hong Kong

• Hang Seng opens flat; Shanghai Composite opens +0.3%
• (CN) President Trump: Will have a signing summit with China on Trade (Note: no specific details provided)
• (CN) China Jan soybean imports from US 135.8Kt v 69.3Kt m/m v 5.8Mt y/y
• (CN) China Banking and Insurance Regulatory Commission (CBIRC): Q4 Non-Performing Loan (NPL) ratio for commercial banks 1.83% v 1.87 prior; Outstanding bad loans CNY2.03T v 2.04T prior
• (CN) China Banking and Insurance Regulatory Commission (CBIRC): Large state owned lenders, should see loans to small and micro firms for amounts CNY10M or less, to rise 30% y/y or more in 2019 v +21% in 2018 – Xinhua
• (CN) China Banking and Insurance Regulatory Commission (CBIRC) Deputy Chair Wang Zhaoxing: The risk of a financial meltdown in China's economy has been largely avoided – SCMP
• (CN) China PBoC sets Yuan Reference Rate: 6.6952 v 6.7131 prior
• (CN) China PBoC Open Market Operation (OMO): Injects CNY120B in 7-day reverse repos v CNY40B injected in 7-day reverse repos prior; Net: CNY120B injected v CNY40B injection prior

Australia/New Zealand

• ASX 2 00 opened -0.2%
• (AU) Australia ANZ Roy Morgan Weekly Consumer Confidence: 114.1 v 115.2 prior
• BLY.AU Reports FY18 Net -$43.5M v -$150M y/y; Rev $770.2M v $739.1M y/y
• CTX.AU Reports FY18 (A$) RCOP Net 558M v 638M y/y; EBIT 829M v 929M y/y; Rev 21.7B v 16.3B y/y; starts A$260M buyback
• SDA.AU Reports FY18 (A$) underlying Net 48.1M v 5.9M y/y; EBITDA 132.0M v 60M y/y; Rev 623.1M v 304.9M y/y
• IPL.AU Guides negative impact to EBIT of A$100-120M related to outage in Queensland
• (AU) Australia Govt: To review operation of milk price index
• (NZ) RBNZ Dep Gov Bascand: Bank capital plan could reduce Govt borrowing costs

North America

• (US) Fed's Vice Chair Clarida (moderate, voter): Now a good time to review Fed policy framework; Fed can afford to be patient with inflation remaining muted
• TSLA SEC said to ask judge to hold Musk in contempt for violating deal, cites Feb 19th Tweet by Musk regarding production - US financial press
• (US) US Trump: US farmers will benefit if deal made with China

Europe

• (UK) Prime Min May reportedly will propose formally ruling out a no-deal Brexit, which could lead to postponement of March 29 Brexit date by several months - UK's The Sun
• (UK) UK planning to pay "billions" to EU even in a "No Deal" Brexit - Telegraph
• STAN.UK Reports FY18 adj Pretax $3.86B v $3.01B y/y, underlying Op $14.9B v $14.3B y/y

Levels as of 12:50ET

• Hang Seng -0.5%; Shanghai Composite +0.5%; Kospi -0.4%; Nikkei225 -0.4%; ASX 200 -0.9%
• Equity Futures: S&P500 -0.3%; Nasdaq100 -0.5%, Dax -0.2%; FTSE100 -0.3%
• EUR 1.1352-1.1372; JPY 110.76-111.08 ; AUD 0.7151-0.7174; NZD 0.6875-0.6889
• Commodity Futures: Gold +0.1% at $1,330/oz; Crude Oil -0.6% at $55.16/brl; Copper -0.2% at $2.94/lb

Daily Pivots: (S1) 1.5803; (P) 1.5849; (R1) 1.5889; More....

EUR/AUD is staying in range above 1.5721 and intraday bias remains neutral first. Further rise is mildly in favor. On the upside, decisive break of 1.6060 resistance should confirm that decline from 1.6765 has completed. Further rally should then be seen to retest 1.6765 high. On the downside, however, break of 1.5721 will extend the decline to 1.5346 support instead.

In the bigger picture, as long as 1.5346 support holds, outlook will remain bullish. Uptrend from 1.1602 (2012 low) is expected to resume sooner or later. Break of 1.6765 will target 61.8% retracement of 2.1127 (2008 high) to 1.1602 at 1.7488 next. However, firm break of 1.5346 key support will indicate trend reversal, with bearish divergence condition in weekly MACD, and turn outlook bearish.

Daily Pivots: (S1) 1.1337; (P) 1.1354; (R1) 1.1378; More...

EUR/CHF recovers mildly today but stays inside range of 1.1310/1444. Intraday bias remains neutral for the moment. As long as 1.1310 support holds, further rise is mildly in favor. On the upside, break of 1.1444 will resume the rebound from 1.1181 to 1.1501 key resistance next. Nevertheless, sustained break of 1.1310 will suggest that rebound from 1.1181 might be completed. Intraday bias will be turned back to the downside for 1.1181 low again.

In the bigger picture, price actions from 1.2004 medium term top is seen as a correction only. Downside should be contained by 1.1154/98 support zone to complete it and bring rebound. Decisive break of 1.1501 (38.2% retracement of 1.2004 to 1.1173 at 1.1490) will confirm completion of the correction, on bullish convergence condition in daily MACD. Further rise should be seen to 61.8% retracement at 1.1687 and above next.