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Pro-EU campaigners updated so called "Roadmap to a People's Vote" to push for a referendum on Brexit if, and likely so, Prime Minister Theresa May's deal is voted down in the Commons next week. The report note that "Nobody has come forward with a proposal that could secure a majority in the present circumstances. The blunt reality is that such a proposal does not exist". And, "the only credible way forwards for (lawmakers) will be to hand the decision back to the people." While a referendum would inevitably require extending Article 50 and delaying the March 29 Brexit date, the group said 27 other EU member states are unlikely to stand in its way.

The group preferred a "binary choice": for the referendum": either the Government's deal vs staying in the EU; or an alternative, deliverable form of Brexit vs staying in. But they do not entirely rule out a referendum with three options.

Full "Roadmap to a People's Vote: The Route Opens Up".

The BoC is expected to remain on hold today at +1.75% (15:00, GMT) and currently CAD OIS imply a probability of 88.30% for the bank to do so. Should the bank remain on hold as forecasted, we could see markets turning their attention to the accompanying statement and the following press conference (16:15, GMT) . With inflation rates (both headline and core) being below the bank’s median target and oil prices being in the last few weeks, arguments for a more dovish tone on behalf of the bank which could be pushing future rate hikes into the future are strengthening. On the other hand, as oil prices may start rising and the bank may want to maintain its options open about its future rate hike path, the bank may adopt a more neutral tone or even have some hawkish elements present. Also it should be noted that the monetary policy statement to be released today, may contain alterations to the CPI and GDP forecasts which could also affect the Loonie’s direction. USD/CAD dropped even lower yesterday clearly breaking the 1.3290 (R1) support line (now turned to resistance). We see the case for the pair to continue trading in a bearish market today, however it may prove sensitive to the releases of the FOMC meeting minutes and especially the BoC interest rate decision. It should be noted that the RSI indicator in the 4 hour chart remains below the reading of 30, implying a possibly overcrowded short position. Should the bears continue to dictate the pair’s direction we could see the pair breaking the 1.3215 (S1) support line and aim for the 1.3145(S2) support barrier. Should on the other hand the bulls take over we could see the pair breaking the 1.3290 (R1) resistance line.

US-Sino trade negotiations to be extended

Media report that the ongoing US-Sino negotiations in Beijing, are to be extended for an unscheduled third day. It should be noted that the extension of the negotiations along with a number of comments made, enhanced optimism for a possible deal between the two largest economies in the world. Media also report that progress made seems to concentrate around issues such as purchases of China from the US for Farm and energy products, as well as increased US access to Chinese markets. Chinese media stated that China is keen to solve the trade dispute with the US, however is not willing to make any “unreasonable concessions”. Analysts point out that growing optimism about the end result of the negotiations could support commodity currencies such as the AUD, as well as WTI prices to a lesser extent. AUD/USD maintained a sideways movement yesterday and rose slightly during today’s Asian session, breaking just above the 0.7150 (S1) resistance line (now turned to support). We may see the pair rising even further, especially should there be good news from the ongoing US-Sino trade negotiations. Should the pair find fresh buying orders along its path, we could see it aiming or even breaking the 0.7230 (R1) resistance line. Should the pair come under the selling interest of the market, we could see it breaking the 0.7150 (S1) support line and aiming or even breaking the 0.7065 (S2) support level.

In today’s other economic highlights:

In today’s European session, we get Germany’s trade balance for November, Switzerland’s CPI rate for December, Eurozone’s unemployment rate for November and in the American session we get Canada’s number of housing starts (Annualised) for December and later on the Fed is to release FOMC meeting minutes. Please note that Atlanta Fed President Bostic, Chicago Fed President Evans, BoE Governor Mark Carney and Boston Fed President Rosengren will be speaking today.

USD/CAD H4

Support: 1.3215 (S1), 1.3145 (S2), 1.3060 (S3)
Resistance: 1.3290 (R1), 1.3350 (R2), 1.3425 (R3)

AUD/USD H4

Support: 0.7150 (S1), 0.7065 (S2), 0.6930 (S3)
Resistance: 0.7230 (R1), 0.7330 (R2), 0.7420 (R3)

The Euro was up in early Wednesday’s trading and retraced the largest part of Tuesday’s dip, after bulls repeatedly stalled at 100SMA.

Weaker dollar on fresh risk-appetite mode on hopes of US/China trade deal helped the single currency to keep traction for renewed attempts at 100 SMA (1.1478) and 2019 high (1.1496).

Bulls may extend for test of another key barrier at 1.1515 (daily cloud top / 50% retracement of 1.1815/1.1215 descend, on sustained break above 100SMA that would generate bullish signal.

Bullish daily studies support the notion, however, overbought conditions and concerns about EU economy slowdown require caution.

Rising 10SMA marks solid support at 1.1417, loss of which would ease upward pressure.

Res: 1.1478, 1.1496, 1.1515, 1.1550
Sup: 1.1444, 1.1436, 1.1417, 1.1391

WTI oil maintains positive tone on Tuesday and probes again through falling 30SMA (currently at $49.19) which limited Monday's action.

Oil price remains in green for the sixth straight day and eyes pivotal barriers at $49.89 (Fibo 61.8% of $54.54/$42.36) and psychological $50 barrier, supported by hopes for successful end US/China trade talks, news that Turkey resumed imports from Iran and optimism that production cut by major oil exporters would result in stabilizing oil market.

Improving daily techs (momentum is attempting into positive territory and 10/20/30SMA's turning to bullish setup) support advance, which looks for bullish signal on sustained break above $50 zone.

On the other side, headwinds from fears of global slowdown which would reduce demand, could be limiting factor.

Broken 20SMA offers initial support at $47.90), followed by north-turning 10SMA ($46.47), loss of which would weaken near-term structure.

Release of US crude stocks reports (API today and EIA on Wednesday) would provide fresh signals.

Res: 49.89, 50.00, 50.90, 51.67
Sup: 48.45, 47.90, 46.47, 46.14

The Australian dollar extended advance and hit new three-week high at 0.7171 in Asian trading on Wednesday, as fresh optimism over US/China trade talks deal boosted riskier assets and commodity-linked currencies.

Strong bullish sentiment offset negative impact from downbeat Australian data (building approvals Nov -9.1% vs -0.3% f/c), as the pair cracked the lower boundary of strong resistance zone between 0.7164 and 0.7183, consisting of a cluster of daily MA's and the base of daily cloud.

Bulls need to break these barriers and emerge above daily cloud (cloud top lays at 0.7227) to generate strong signal for extension of recovery from 0.6706 spike low, however, strongly overbought daily slow stochastic warns that the rally may show hesitation here.

Consolidation above 20SMA (0.7109) is seen as ideal scenario to keep bulls in play, while break lower would weaken near-term structure and risk test of lower pivot at 0.7072 (rising 10SMA).

Res: 0.7171, 0.7183, 0.7227, 0.7246
Sup: 0.7133, 0.7109, 0.7072, 0.7050

Pivot (invalidation): 108.45

Our preference Long positions above 108.45 with targets at 109.10 & 109.50 in extension.

Alternative scenario Below 108.45 look for further downside with 108.05 & 107.45 as targets.

Comment The RSI is bullish and calls for further upside.

Pivot (invalidation): 1.2750

Our preference Short positions below 1.2750 with targets at 1.2695 & 1.2670 in extension.

Alternative scenario Above 1.2750 look for further upside with 1.2790 & 1.2815 as targets.

Comment The upward potential is likely to be limited by the resistance at 1.2750.

Pivot (invalidation): 1.1435

Our preference Long positions above 1.1435 with targets at 1.1485 & 1.1500 in extension.

Alternative scenario Below 1.1435 look for further downside with 1.1420 & 1.1400 as targets.

Comment The RSI lacks downward momentum.

Pivot (invalidation): 5.4370

Our preference Long positions above 5.4370 with targets at 5.5120 & 5.5600 in extension.

Alternative scenario Below 5.4370 look for further downside with 5.3970 & 5.3510 as targets.

Comment Even though a continuation of the consolidation cannot be ruled out, its extent should be limited.

Pivot (invalidation): 0.7130

Our preference Long positions above 0.7130 with targets at 0.7185 & 0.7200 in extension.

Alternative scenario Below 0.7130 look for further downside with 0.7110 & 0.7080 as targets.

Comment The RSI is bullish and calls for further advance.