Over the last week, we had many catalysts we were watching that could affect the market- the first being Brexit negotiations- which by Friday, showed enough signs of continuance to not scare traders away- it was stated that progress was limited, but any progress is better than no progress in this climate and Sterling caught a bid on Friday afternoon.

I am watching any rally on Sterling very closely, as these could be short-lived if it seems that a trade deal is not actually in sight- Boris Johnson has repeatedly stated that he will walk away from the table (Even though we’ve heard that countless times before) if there is not a realistic chance of a deal this year.

The second catalyst this week was the ECB injecting 600 Billion Euros of stimulus into the economy with a blitz of bond purchases. This also helped the Euro, which is why GBPEUR didn’t really see much in terms of gains last week, and EURUSD rose to 1.1350.

The last catalyst we saw was on Friday after a surprise positive U.S jobs report showing that the U.S economy actually ADDED jobs over the course of May- instead of massive job losses that every economy has seen- however this did not stall GBPUSD rates as we saw highs of 1.27 by the end of Friday.

So where do we go from here? Coronavirus is still out there, UK cases and deaths are falling at a very slow pace, and many people are concerned about a second spike as the economy reopens amidst protests across the globe. The Brexit risk is still high until we know for sure what is going to happen with the UK/EU deal, Sterling gains will be capped.

As social unrest continues in the U.S- it is possible that the Dollar weakens further- so there could be opportunities on GBPUSD & EURUSD- as far as GBPEUR is concerned, I am still waiting for an approach to 1.13- if we manage to close above that area then 1.15 is a possibility in the short term as the UK economy reopens. However, as stated above, gains I feel may be capped due to the Brexit risk, so please be nimble when trading as the market landscape is changing on a daily basis at the moment.

The one thing to remember is we are still in a pandemic, so the risks that were there in March, still exist now (Sorry to be negative)- but what goes up, doesn’t just continue going up- so if you see a rate that works for you- I am always an advocate of taking profits off the table.

As ever, if you have any further questions or queries- please don’t hesitate to reach out.