Global macro overview for 16/11/2017

Mark Carney, Governor of Bank of England, reiterated the need for a transitional process in leaving the European Union. Applying the above solution will minimize the occurrence of shocks not only in the island economy but also in the euro area. Carney declares that the BoE can use a broad range of instruments if necessary and admits that BoE will support economy whatever the Brexit deal outcome.

There are just three rounds of negotiations before December's EU summit, where EU leaders will have to decide (again) if sufficient progress has been made. Except for the recent "dovish hike" by Bank of England and self-evident Brexit uncertainty. the negotiations might have an impact on the British Pound exchange rate as well as the recent internal development on the UK political scene. Moreover, recent scandals are threatening PM May's thin majority and are likely to leave the Tory party (and May's leadership) weakened.

Let's now take a look at the GBP/JPY technical picture at the H4 time frame. The market remains locked inside of a horizontal zone between the levels of 148.01 - 150.32. The momentum in either direction is low as the indicator oscillates around its fifty level. The market participants are waiting for the breakout in this pair.

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