Australian political instability rises!

PM Malcolm Turnbull, faces the possibility of a second leadership vote within the Liberal party as three ministers deserted him so far. After a leadership vote, and after a calling for a second leadership vote, ministers deserted the PM. Currently parliament has been adjourned, if we see any further escalation we could see the Aussie weakening.

AUD/USD dropped steeply today, breaking the 0.7325 support line. We could see the pair stabilising today… We could see it breaking the 0.7325 resistance line. On the other side, we could see the pair breaking the 0.7265 support line and aim for the 0.7200 support area.

Theresa May appeases temporarily her ministers

On other headlines, Theresa May seems to have pacified at least temporarily, her ministers, especially Brexit minister Davis. Agreement seems to have been reached, as a rather vague notion of a deadline for the UK to leave the EU customs union has been added to May’s proposals for the EU. The agreement raised some eyebrows in the Brexiteers camp as it is not the clear cut-off point they were asking for, while on the other hand it left the EU officials unimpressed. The markets could be on the watch out for a possible press conference by EU’s chief negotiator’s Barnier, for any comments. Should there be any further negative headlines about Brexit we could see the pound weakening.

Cable rose yesterday during the early European morning breaking the 1.3425  resistance line, however relented some of its profits later on, stabilized and continued trading below the prementioned resistance line in a sideways motion. Technically, an upward trend-line seems to form, incepted since the 29th of May, strengthening the argument for a bullish bias. Hence, we see the case for the pair to trade in a sideways manner with some bullish tones, unless the prementioned upward trend-line is clearly broken. Should bulls take over we could see the pair breaking the 1.3425 resistance line aiming for the 1.3500 resistance hurdle. Should the bears take over we could see the pair aiming for the 1.3330 support line.