From a technical standpoint, although the Dollar Index is slightly pressured on the daily charts, a decisive breakout above 101.50 could open a path back towards 102.00.

Sterling could turn chaotic

Investors should be prepared for a chaotic rollercoaster ride when dealing with Sterling as the Brexit developments, political risk and overall uncertainty sparks explosive levels of volatility. It was only on Monday investors were speculating that Article 50 will be triggered as soon as Tuesday before markets confirmed that Theresa May will start the Brexit negotiations at the end of the month. Recent reports released during early trading on Wednesday suggesting that the European Union could force the UK to wait until June to start the Brexit talks has compounded to the confusion which may translate to more pain for Sterling in the longer term. With the ongoing Brexit woes effectively strengthening the relationship between uncertainty and Sterling, further downside losses should be expected.

Concerns remain elevated over Brexit having negative impacts to the UK economy with the recent mixed jobs reports providing permission for bears to send the GBPUSD lower. Although the unemployment rate in the UK has declined to its lowest since 1975; the decline in average earnings that may rekindle concerns over the sustainability of UK’s consumer fuelled economic growth could weigh heavily on sentiment. The Brexit anxieties have gripped the Pound and the frighteningly low buying sentiment may cap major upside gains moving forward.

From a technical standpoint, the GBPUSD is heavily pressured on the daily charts. Price weakness below 1.2150 could encourage a decline towards 1.2000.

Commodity spotlight – WTI

WTI Crude descended deeper into the abyss on Tuesday after reports of a surprise output jump from Saudi Arabia revived concerns of the excessive oversupply in the global markets. There was already a small seed of doubt over the compliance side of the production cut agreement with this release providing the permission for bears to attack oil prices. It is becoming clear that the optimism over the OPEC production cut is rapidly diminishing with fears of the cartel not renewing the deal for the second half of the year already translating to renewed selling pressures. Oil market weakness has become a key theme this quarter and bears may install fresh rounds of selling if U.S crude inventories continue to rise incessantly. From a technical standpoint, WTI Crude is heavily bearish on the daily charts. Previous light support around $49 may transform into a temporary resistance which may open a path back down towards $47.