The US markets have seen some resurgence in the afternoon/evening session of trading, as threats of a trade war and tariffs seemed to subside for Canada and Mexico, with Trump saying that he would make them exempt for national security reasons. Take what you want from it, but it shows that the Trump administration can be quite flexible on these things and the markets agreed that it was a positive sign, rather than getting into a trade war with the global economy.

The S&P 500 was of course a benefactor of the renewed optimism in Trump as it jumped up the charts in a show of strength to just below resistance at 2743. The US equity bulls will be watching to see if the Trump administration does away with tariffs completely or even waters them down heavily compared to what is being proposed. For traders the most interesting area if we do see some bearish movement is around the 100 day moving average at present. With bullish traders looking to take advantage of bearish pressure here to buy strongly. However, if this fails support at 2666 and 2628 continues to act as a buffer for the bears, with the 200 day moving average just below act as the final level to beat. If the bullish run does continue then I would expect resistance at 2743 and 2807 to be tested in the long run.

The UK economy has also been in the spotlight recently as Tusk has said on the record there cannot be a bespoke deal for the UK when it comes to Brexit – more specifically a blend of the Norway and Canada trade agreements with the EU. However, politicians from the UK side still believe it’s possible, and have been quick to argue that the EU needs the UK. This may be a bit of a fools folly in the current climate as the EU has been more hard-line with the UK and it would seem that the Pound could be on a bit of a crash course with major pairs as things start to become a little more unstuck globally.

The GBPUSD is a good example of recent bullish hope, that has now subsided and start to show signs of bearish weakness in the current market climate. The long term bullish trend line has been in play  for some time, but we’ve started to see a short term bearish trend line form, which is causing the market to consolidate further. Resistance at 1.3996 is likely to be a very strong level in the current market climate, especially with that trend line pushing down. The next level above at 1.4135 is also set to be very strong, but I’d be surprised to see a jump up higher anytime soon unless we see a major Brexit breakthrough. Support levels at 1.3797 and 1.3593, but I would also be watching the 100 day moving average creeping up the charts, which will act like dynamic support if tested by the market.