The British pound erased earlier losses as traders reacted to the latest developments on Brexit. Over the weekend, Boris Johnson and Ursula von der Leyen agreed to restart the talks as key issues remained. While the two sides have made progress in the past few days, there are a few outstanding issues. For example, France has pledged to veto any deal that limits its exposure to UK waters. Another key issue is the level playing field that governs future competition between the two sides. Still, with time running out, most analysts believe that the two sides will reach an agreement.
The Australian dollar was little changed during the Asian session after upbeat services PMI data from Australia. According to the Australian Industry Group (AIG), the services index rose to 52.9 in November from 51.4 in the previous month. This is a signal that the services sector, which employs millions of people is doing well. Another report by ANZ Bank showed that the number of job advertisements increased from 11.9% in October to 13.9% in November. Later today, the pair will react to the exports and import data from China.
The economic calendar will be relatively light today. The main data to watch will be the PMI data from Canada. Economists expect that the data dropped from 54.5 in October to 51.5 in November. It will come two days after the country released encouraging jobs numbers. Elsewhere, in Sweden, the statistics office will release the industrial production data while in the UK, Halifax will release the house price index. Other important data will be the leading index from Japan.
The EUR/USD pair is trading at 1.2136, which is slightly above the intraday low of 1.2110. On the hourly chart, this price is along the 28-day and 14-day exponential moving averages while the Relative Strength Index (RSI) has moved from a low of 1.34 to the current 50. The dots of the Parabolic SAR are above the price. Therefore, while the pair will likely continue rising, there is a possibility of a pullback. If it happens, the key support to watch will be today’s low of 1.2110.
The GBP/USD bounced back from an intraday low of 1.3400 to a high of 1.3433. The four-hour chart shows that the price is below last week’s high of 1.3537. It is also above the ascending trendline that is shown in yellow. It is between the 28-day and 15-day exponential moving averages while the Relative Strength Index (RSI) has also made a pullback. Therefore, for today, the pair will likely remain in the current range as traders watch the Brexit situation.
The AUD/USD is little changed after the important services index. It is trading at 0.7430, which is slightly lower than last week’s high of 0.7448. On the hourly chart, the price is above the ascending trendline that is shown in yellow. It is also on the same level as the 14-day and 28-day exponential moving averages while the Average Directional Index (ADX) has continued to move lower. Therefore, the pair will possibly remain in the current range today.