Action Insight Weekly Report 1-19-19
Trade Optimism Lifted Stocks, Yields and Dollar | Action Insight Weekly Report 1-19-19 | | Trade Optimism Lifted Stocks, Yields and Dollar |  Brexit and US-China trade negotiation were the two major themes last week. After a week of drama, it's still unclear exactly what kind of Brexit deal would get through the Parliament. There's some anticipation for UK Prime Minister Theresa May on her plan B on Monday. Yet she could fail to deliver again. Nevertheless, Sterling ended as the strongest one last week on perceived diminishing chance on no-deal Brexit. On the other hand, Dollar gained as there are signs of progress in the trade talks. Or at least, words from the US side were positive. The developments also lifted stocks and treasury yields. The US government shutdown is extending its record run with no end in sight. But it's largely ignored by traders. New Zealand Dollar ended as the weakest one, followed by Swiss Franc and then Yen. | GBP/USD Weekly Outlook GBP/USD's corrective rise from 1.2391 extended to 1.3001 last week but formed a temporary top there and retreated. Initial bias is neutral this week for some consolidations first. Further rally is expected as long as 1.2668 minor support holds. On the upside, above 1.3001 will target 1.3174 resistance, which is close to 38.2% retracement of 1.4376 to 1.2391 at 1.3149. We'd expect strong resistance from there to limit upside, at least on first attempt. On the downside, break of 1.2668 support will argue that such rebound is completed and turn bias back to the downside for retesting 1.2391 low. |  | | | |
