GBP slides as Boris letter falls on deaf ears

Summary:

• Pound moving lower across the board

• FTSE working on 4th consecutive daily gain

• BHP drops despite record dividend

The pound has continued lower this morning as the UK and EU remain a long way apart on the issue of the Irish border, and there’s little sign of a solution anytime soon. A letter from UK PM Boris Johnson to Donald Tusk, president of the European Council, has been seemingly rebuffed with the initial unofficial response from Brussels a mixture of disdain and disbelief. The latest effort from Boris to persuade the EU to move their lines on the Irish border has fallen on deaf ears and given the ardent belief each party has in its respective view it’s becoming increasingly hard to envisage a way out of the current impasse. The pound has sunk back below the $1.21 handle and remains not far from its lowest level in more than 3 decades!

GBPUSD is back near its lowest level since 1985 and prior support around 1.2015 could be set for a retest. There is some positive divergence seen on MACD, but a move above 1.2180 is needed to end this recent period of consolidation in a positive manner. Source: xStation

FTSE extends recovery

There’s been more gains seen in blue chip stocks in London, with the FTSE rising to its highest level in 4 sessions after dropping to a 6-month low last week. A broad improvement in global risk sentiment has helped the benchmark recoup some of the recent declines, but the outlook remains a little fragile going forward. Despite the latest move higher the index remains below last week’s high and at the moment the price action looks more like a consolidation after last Wednesday’s rout rather than a clear longer term bottom. 

BHP announce record dividend 

There’s been a fairly nonplussed reaction to the latest set of results from BHP after the world’s biggest miner announced a pretty solid set of results. The highlight for investors was a record final dividend of $0.78 per share, but even though there was a 2% increase in underlying profits for the past year this missed consensus analysts’ forecasts. Shareholders will be hoping that the firm is coming out the other side of a tough few years for mining firms, as cost cutting measures start to bear fruit and rising commodity prices contribute to a more favourable operating environment. The stock is listed on multiple exchanges and in London is trading lower by just over 1% this morning. 

BHP shares have pulled back and trade around the 200 day SMA once more. Possible support may be found around 17.05 but a decisive move below there would threaten to end the uptrend that has been in place since the 2016 low around 5.75. Source: xStation