Morning Commentary & Currency Insights – November 15, 2018

Sterling has been the story for the last 24 hours seeing wild gyrations that moved the currency between 1.2750 & 1.3050 in reaction to headlines.  PM May has presented the Brexit plan to her cabinet which has resulted in 4 resignations, including a particularly damaging one from Dominic Raab sparking fears the UK could leave the EU without a firm deal.  This political upheaval has dominated the markets with most other currencies & European bourses witnessing tight ranges from the sidelines.  Yesterday’s U.S. inflation data came in as expected keeping the DXY within recent ranges while oil has ceased its slide and hovers near recent lows. The only thing of note today will be FED Chairman Powell speaking about Hurricane Harvey recovery efforts at an event hosted by the Federal Reserve Bank of Dallas, in Houston where he may answer questions on FED policy afterwards.

USD/CAD has topped out twice at 1.3264 but remains within striking distance of the previous double top at 1.3290 seen in July.  Plenty of sell orders have been capping recent price action ahead of these levels but with recent events weighing on the Canadian dollar we will need to see next week’s Canadian data if there is to be any relief outside of a pause in overall USD strength.  Key levels remain 1.3290 above & 1.3180 below.