Investors, businesses, and traders had high hopes for the personal meeting between British Prime Minister Boris Johnson and the head of the European Commission, Ursula von der Leyen, but ended up disappointed.
A scallop and turbot dinner in a pleasant atmosphere baked with potatoes and tomatoes went well if it weren't for the multi-billion dollar trade agreement between the UK and Europe.
Based on the comments made after a three-hour business dinner, the leaders got nowhere.
"We had a lively and interesting discussion about the state of affairs on the list of outstanding issues. We got a clear idea of our positions. They remain far apart," Ursula von der Leyen said in a statement.
A British government spokesman told reporters during an interview that the parties have very big differences, and it is still unclear if they can be overcome.
The core of the disagreement lies in key issues, but following from the past day, it is clear that access to British fishing waters is not the most sensitive issue of the discussion.
German Chancellor Angela Merkel let slip a few hours before the scheduled dinner that the European Union's rules of doing business and the so-called "level playing field" are the key to any deal.
To which Boris Johnson responded sharply, as he sees this disagreement: "Our friends in the EU insist that they have an automatic right to punish us or take retaliatory measures if they pass some new law in the future, and we are in our country will not fulfill it or will not accept the same. Second, they demand that Britain be the only country in the world that does not have sovereign rights over its fishing grounds. I think no prime minister of our country would agree to this," said the British Prime Minister.
In fact, from that moment it became clear that there would be no discussion, and even before the dinner party began, the pound sterling began to decline.
What did Johnson and von der Leyen agree on?
It was decided to resume bilateral negotiations in order to still find common ground and possible ways to resolve existing differences, but this time the deadline is set aside until the end of this week - December 13.
In fact, the negotiators will need to make a firm decision about the future relationship.
Is this the long-awaited end of this drama? It's hard to believe so far.
In terms of market analysis, it is clear how actively speculators are working on the information noise, where at first, on expectations of Johnson's trip to Brussels, the pound rose in price, reaching 1.3476. As soon as information from Germany began to appear and Boris Johnson's response on the topic of "level playing field" began to appear, the British currency changed direction at the moment, eventually dropping to the point where it started to grow - the 1.3360 mark.
As for the market dynamics for December 9, here, as before, there is high activity - 126 points, which is 6% above the average level. Since the beginning of December, the daily volatility indicator has not dropped below 100 points, which indicates a high activity of speculators in the market.
Looking at the trading chart on the scale of the daily period, you can see a medium-term upward trend, where recently there was a stop at its conditional peak, which in the future may give a corrective move in the market.
UK statistics were released today in terms of the economic calendar. Industrial production, instead of the expected slowdown, demonstrates an increase of 1.7% in October. In finished terms, the rate of decline slowed down from -6.3% to -5.5% against the forecast of -6.5%.
The numbers are not bad at all, but they are of little interest to the market when the Brexit passions are raging.
In the afternoon, the weekly data on jobless claims in the United States is published, where I predicted a decrease in their volume.
The volume of repeated applications for benefits can be reduced immediately by 185,000 from 552,000 to 533,500.
The number of initial applications may remain unchanged or increase by 13,000.
At the same time, the final data on inflation in the United States will be published, where the growth rate of consumer prices should remain unchanged.
Analyzing the current trading chart, one can see that from the very opening of the daily candlestick, sellers predominate in the market, where the pound is losing. The quotes have already crossed the 1.3300 mark and is standing in the way of this week's minimum of 1.3223. Local overheating of meek positions can lead to temporary rollbacks, for example, from the 1.3223 area.
Brexit information noise continues to put pressure on the market, which is actively used by speculators. The lack of a proper result in resolving the key issues of the deal during the past day frightens investors, which leads to the weakening of the pound.
We continue to carefully analyze the Brexit information flow for breaking news, where the tactics of dealing with information noise remain unchanged.
Positive news on the negotiations leads to the strengthening of the pound sterling.
Negative news leads to a weakening of the pound sterling.
As for price movements, it is worth considering that the pound is still overbought, taking into account where the quote is - at the conditional peak of the medium-term upward trend.
In case of a breakdown of the low of the current week, the market may move to a full-size correction in the direction of the psychological level of 1.3000. The process is not quick, it can take several days, and also roll over sell positions to lower levels.
Do not forget that information noise is currently the main incentive for speculators.
Information can be retrieved both from our website - analytics section, as well as directly from the media, for example - Bloomberg, Wall Street Journal, Reuters.
Indicator analysis
Analyzing different sectors of timeframes (TF), it can be seen that indicators of technical instruments signal a sell due to a rapid downward movement. When the market is so oversaturated with speculation and follows the information noise, the indicators can be volatile.
Weekly volatility / Volatility measurement: Month; Quarter; Year
The volatility measurement reflects the average daily fluctuations, calculated per Month / Quarter / Year.
(December 10 was built taking into account the publication time of the article)
The dynamics of the current time is 166 points, which is 39% higher than the average. The volatility is very high, which indicates an active influence on the part of speculators.
Key levels
Resistance zones: 1.3300 **; 1.3400 *; 1.3600; 1.3850; 1.4000 ***; 1.4350 **.
Support Zones: 1.3000 ***; 1.2840 / 1.2860 / 1.2885; 1.2770 **; 1.2620; 1.2500; 1.2350 **; 1.2250; 1.2150 **; 1.2000 *** (1.1957).
* Periodic level
** Range level
*** Psychological level
