Sterling rose today as the markets cheered the latest polling on the upcoming election. The currency was on track for its best one-day gain in weeks. The latest polls showed that the Tories would beat Jeremy Corbyn’s Labour party. A Financial Times poll showed the Tories with a 14-point lead. The two parties have already revealed their manifestos and it appears that voters favour Boris Johnson. Yesterday, he unveiled his manifesto and announced that he would not raise taxes. He also pledged that he would complete Brexit by Christmas. Contrary to the norm, the FTSE also rose too. Often the FTSE declines when the sterling rises.
The euro declined against the USD as the markets reacted to the latest confidence data from Germany. Survey data showed that the business climate increased from 94.7 to 95.0. The current assessment data showed an increase from 97.8 to 97.9 while business expectations rose from 91.6 to 92.0. These numbers were the third straight monthly improvement, which signals that business leaders are optimistic about the economy. This is a sign that the recent weakness is bottoming. However, manufacturers in the country are still pessimistic. The net balance of those who reported good or poor business came at -5.9.
US futures rose today as the market continued to remain optimistic about the ongoing trade talks between the US and China. Over the weekend, China said that it would tighten its rules to prevent the theft of intellectual property. This is a major concession from a country that has seen significant success from stealing foreign intellectual property. The market also received significant positive and negative corporate news. Charles Schwab confirmed that it was acquiring TD Ameritrade in a $26 billion all-stock deal. Also, LVMH confirmed that it was acquiring Tiffany for $16.2 billion while Elon Musk confirmed that 200k people had placed an order for the new Cybertruck. On the negative side, Uber lost its license to operate in London, which is a key market.
The EUR/USD pair declined to a low of 1.1010. It is now trading at 1.1012, which is along the 23.6% Fibonacci Retracement level. The price is below the 14-day and 28-day moving averages. The momentum indicator is slightly below 100. The pair may continue to move lower to a low of 1.1000, which is important support.
The GBP/USD pair rose to a high of 1.2885. This price is along the 50% Fibonacci Retracement level. The price is slightly below the upper line of the Bollinger Bands. The RSI has been moving upwards from the oversold level of 19 to 54. The pair may continue moving higher to test the 38.2% Fibonacci Retracement level of 1.2900.
The FTSE 100 index rose to a high of £7380 as the markets received Boris Johnson’s manifesto and the latest polling data. The index is now trading at £7378. The index is trading along the upper line of the Bollinger Bands. The Parabolic SAR dots are trading below the price, which is a bullish signal. The RSI has continued to soar and is above the overbought level of 70. The index may continue to soar as it attempts to test the resistance level of £7,400.