Pound drops on austerity extension

Morning Report: 08.30 London

• This morning, this pound is suffering after UK Chancellor announced an extension of austerity measures. The GBP/JPY is off by 0.56%, with the GBP/USD down 0.37% and the EUR/GBP up 0.45%.

 • The yen pairs are generally lower, though the USD/JPY is off the morning lows as the dollar index struggles as resistance.

Coming up today:

• This morning, Spanish services have come in above expectations, with final services due at 09.00.

• At 09.30 we have UK services PMI alongside final services PMI.

• From 13.30 we switch to North America, with Canadian RMPI, followed by US final services PMI at 14.00.

• From 15.00 we have US ISM non manufacturing PMI, with the Fed Chairman Nomination Vote at 20.30.

Trade Idea:

• The morning’s pound reaction seems a little overdone and a rebound could be on the cards in coming days.

A good way to play this is a LOWER trade predicting that the EUR/GBP closes below 0.8300 in 3 days time for a potential return of 120%.

This Daily Market Report is written by Dave Evans, Professional Trader. This is presented as an idea to stimulate binary option trading ideas and is not a financial advice.

Summary: