• The Brexit rhetoric continued in the UK yesterday, ahead of UK’s Parliament voting. Scottish leader Nicola Sturgeon increased the pressure on the UK government to stay in EU single market as she sees growing support for it in the UK. Theresa May’s reply was to reiterate her commitment to getting a good deal which would serve interests of all parts in the UK. Later on, Nigel Farage leader of the Brexit side in the 2016 referendum, stated that he is increasingly concerned about an overturning of the Brexit vote. Media reports quoted UK’s foreign minister saying that he feared a Brexit agreement which would leave the UK subordinate to Brussels, making the 2016 Brexit referendum a total waste of time. As the Brexit bill will be reaching UK parliament the tones could get higher and higher leaving the UK government with little flexibility as it will get more pressure from both sides.

• Cable rose yesterday during the European morning breaking the 1.3785 (S1) resistance line (now turned to support, and continued then in a sideways manner hovering slightly above it. We expect he pair to continue in a sideways manner and the overall direction may be dictated by today’s financial news, especially UK’s CPI figure which is due to be released today, as well as any further Brexit headlines. On the technical side, given that the Relative Strength Index has surpassed 70, we could expect a somewhat bearish mood. Should the bears have the upper hand, we expect the pair to break the 1.3785 (S1) support line and head towards the 1.3684 (S2) support zone. Should the bulls take the driver’s seat, the pair could break the 1.3875 (R1) resistance level and aim for the 1.4040 (R2) resistance hurdle.

Bitcoin drops slowly but steadily

• Bitcoin dropped by 1200 USD during today’s early Asian morning. There seems to be no clear fundamental story behind it. On yesterday’s news, media reports suggested that China is about to block cryptocurrency platform's that allow centralised trading. On the European crypto-front, Germany’s central bank stated that any attempt on regulating cryptocurrency should be global. It could be the case that as regulators tighten their grip on cryptocurrencies the value will continue to drop.

• As mentioned, bitcoin dropped during today’s Asian morning, after a four day sideways movement, however it remained above the support level of 12000(S1). We see the case for the cryptocurrency to trade in a sideways manner for the short term. Having said that and as various regulators try to tighten their grip on cryptocurrencies, as well as the possibility that large investors have cashed out somewhat and they may want to cash out their gains even further, we see the case for the cryptocurrency to continue a slow but steady drop over the long run. We also consider that future efforts of various national authorities to regulate the cryptocurrency may deter new investors or new large long positions strengthening even further the pre-mentioned case of a steady drop in the value of Bitcoin in the long run. Should the cryptocurrency come under selling interest, Bitcoin could break the 12000(S1) support level and aim for the 10500(S2) support area. On the other hand should it come under buying interest it could break the 14000 (R1) resistance level and hover slightly above it.

Other highlights for today

• During the European morning, we get Germany’s HICP rate for December, which is forecasted to remain unchanged at +1.6% on a year to year basis and UK’s CPI rate also for December which is expected to tick down. Later on, New Zealand’s milk auction data are to be released.

BTC

• Support: 12000(S1), 10500(S2), 8920(S3)

• Resistance: 14000(R1), 15580(R2), 17000(R3)

GBP/USD

• Support: 1.3785(S1), 1.3684(S2), 1.3620(S3)

• Resistance: 1.3875(R1), 1.4040(R2), 1.4175(R3)