ECB, EU summit and Brexit, Trump's threats and IMF outlookWednesday promises to be a difficult day for the euro and the pound. There are two extremely important events will take place today: the ECB meeting and emergency summit of EU leaders to consider UK request for further extension until 30 June, with the option of an earlier Brexit day if a deal can be agreed.
Let's start with the ECB meeting. Surprises are not expected by markets. The bet might be left unchanged. Everybody will be interested in details of the ECB long-term lending program. In general, we do not expect any bullish signals for the euro, but there should also be no reasons for its sales. In this regard, our position on the euro today is as follows: since the EURUSD is at the lower limit of the medium-term range, we give preference to buying with stops below 1.1170 and profit close to 1.1400.
The information that Trump is preparing to open up a new front in the trade wars could be the problem for the euro. This time he is going to attack Europe. The White House reported that they are considering to moves to impose tariffs on $11 Billion of EU Goods in response to Airbus subsidies, which was declared illegal by the World Trade Organization. The list of goods that come under attack includes not only airplanes and helicopters, but also products of the agro-industrial complex, in particular cheese and wine.
The EU emergency summit seems to be much less predictable by the results of the event and explosions of volatility in pound pairs by its results are very likely. April 12, the UK must leave the EU. Following yesterday's parliamentary vote, approval of the withdrawal agreement has not been given by the UK Parliament so it should be a “No-deal” Brexit. The option is unprofitable for both parties, so we believe that the summit is unlikely to end up being just shown to the UK at the door. This will definitely be a hit to the pound and in this case its fall will be rapid and strong.
Accordingly, the second alternative comes into play - to give the UK another chance. This is the most likely scenario. But he is also divided into alternatives. The first is that the EU satisfies May’s request and extends Brexit’s deadline until June. The second is that the EU is offering Britain a postponement for a long term (for example, a year). Since the initiative is on the EU side, it seems to us that the summit will end up with the EU’s agreement for a long delay. In general, both of these options are positive for the pound. So, as a basic plan for working with pound pairs for today is looking for points for its buying.
The International Monetary Fund on Tuesday cut its global growth outlook for the third time in a row. The IMF projects global economic growth of 3.3% this year. As expected, the economies of developed countries in 2019 will grow by 1.8%, and developing countries - by 4.4%. GDP of China and the United States should increase by 6.3% and 2.3%. This is another reason to pay attention to buying of safe-haven assets. Recall, our recommendation for buying gold on the intraday basis continues to be relevant.
MAY
Bitcoin is growing, the ruble is falling, May gave upTuesday, compared with Monday, turned out to be much calmer in most financial markets. With the exception of the cryptocurrency market. There was a strong surge of optimism, resulting in a sharp increase in Bitcoin. For some time, the cryptocurrency was even quoted above 5,000, which was not the case since November 2018. The growth rate of Bitcoin reached 23% yesterday.
What about the reasons for growth, analysts shrug. There were no special reasons for this. It just looks like a planned attack, which, in view of the relatively low liquidity and market volume, was crowned with success. Some traders, however, suggest that such a rapid growth of cryptocurrency was associated with an April Fool's joke, according to which the US Securities and Exchange Commission (SEC) allowed Bitcoin ETF trading.
We do not recommend encouraging about this and rushing to buy cryptocurrency, because the lack of a proper fundamental base under growth signals in favor of a quick “return”. So we consider yesterday's growth of Bitcoin as a good opportunity for more expensive sales and quick earnings.
Brexit. May gave up and acknowledged that there is no point insisting on the current version of the contract. In the end, she said she wants to develop a new approach to Brexit, together with the leader of the Labor Party, Jeremy Corbyn. Apparently, Theresa May’s new plan will be some combination of her exit agreement and a variant of the customs union, advocated by Corbyn. Recall that the alternative to this is the extension of the Brexit's terms for a long time.
Analysts of the Goldman Sachs Group meanwhile predict a quick resolution of the problems and predict a pound growth. In their opinion, buying pounds can be the most profitable trade among all possible options for trading with currencies of developed countries. Note that we recommend buying the pound for quite some time and we do not plan to change our recommendation.
The ruble continues to be under pressure. The threat of new sanctions does not allow buyers to relax, and the attractiveness of the ruble from the position of "carry-trade" has recently dropped sharply. The reason is the same - an increase in the risk component in the form of new sanctions has sharply reduced the “attractiveness” of the “carry trade” with the ruble. It is much easier in this regard to work with Indian rupee, Mexican peso or Turkish lira.
From yesterday's macroeconomic statistics, it is worth noting perhaps the weak data on goods for durable orders in the United States (down 1.6%).
About the oil markets. OPEC reduced oil production by another 295K b / d in March, and the Iranian Minister of Petroleum Industry announced that OPEC + could be extended without any problems in June. Recall, we recommend buying oil on the intraday basis.
May vs Parliament, lira fevers, and sales have dropped off in USMonday was a very busy day for financial markets. It was partly due to the processing of weekend news (May's statement on Brexit, the results of the elections in Turkey), partly with new news stories. But first things first.
Brexit news. May’s attempt to hold the fourth vote in a row failed so far. Monday didn’t bring anything new to the current Brexit scenario.
What do we have today? Postponement Brexit until May 22, the UK is not available. Now the country must either leave the EU on April 12 or request another delay. The second option is basic. But the timing of the delay - an indefinite value. As we warned it could be a year.
However, you should not relax this week. May may still “push” the vote, early parliamentary elections are possible, May’s resignation and much more is possible. So you should be “careful” with the pound.
Very volatile in recent days in pairs with Turkish lira. This time the outcome was the results of the municipal elections in Turkey. Erdogan and his coalition were defeated in elections in 40 out of 81 polling stations (previously controlled by 49 municipalities), and he has lost Ankara and Istanbul. The central bank of Turkey, meanwhile, literally “burns” its foreign exchange reserves to stabilize the lira. According to data published on Friday, Turkey’s reserves have decreased by one third over the past month (!).
Yesterday’s macroeconomic statistics. The most important, perhaps, were the data on retail sales in the United States. They appeared worse than analysts' expectations and showed a decline for the month (-0.2% m / m with a forecast of + 0.2% m / m). That did not bother buyers of the dollar and it continue to strengthen. However, we recommend looking for points for selling dollar on the intraday basis.
Consumer inflation in the Eurozone came out slightly below the expectations of experts. At the same time, the PMI index in the Eurozone production sector was also worse than forecasts and below 50 (47.5, with the forecast of 47.6). So, it is clearly premature to expect monetary policy tightening by the ECB.
Oil continued its growth yesterday. It is worth noting that the first quarter of 2019 was the best for the oil market since 2002 - the asset after it rose by 32%. This once again confirms the current market sentiment. So we continue to recommend looking for points to buy an asset on the intraday basis.
In addition, we are looking for points for buying gold on the intraday basis, selling the dollar and the Russian ruble.
Brexit, US-China negotiations and Fed's fearsA vote in the UK Parliament regarding possible Brexit scenarios. There were 8 options for solving the Brexit problem, however no clarity followed. All options were rejected by Parliament. In essence, the initiative is again returning to Theresa May, who went all-in yesterday. She promised to resign if lawmakers vote for her version of the agreement with the EU. We continue to monitor developments and earn on the pound “races”.
Yesterday's dollar growth was related to data on the US trade balance, which unexpectedly showed improvement in its condition. Instead of the expected $ 57.0 billion deficit in December, the surplus of imports over exports was $ 51.1 billion.
Despite this, voices are louder and louder from the United States in favor of easing monetary policy. So Stephen Moore (one of the possible future members of the Fed) in an interview with the New York Times said that the Fed should immediately expand the vector of monetary policy and reduce the rate by 0.5% at least. This, of course, is not the official position of the Fed, but rather Trump’s vision (Moore is his protege). This has to be borne in mind, that the pressure on the Fed will increase with time and any weakness of the US economy will be perceived by the markets as a signal favor of the Fed rate cut and the reason for the sales of the dollar.
Meanwhile the negotiations with China continue. The previous dates were clearly failed (we recall that at the end of March the heads of the United States and China should have been signed the agreement). Trump maintains his view and insists on the perfect deal. Despite the failure to meet the deadlines, the process is underway, and yesterday the negotiations were resumed. So, perhaps, in the coming weeks an agreement would still be reached.
The success of the negotiations between the US and China is a positive signal for the commodity markets, as well as the markets of developing countries. In this light, our recommendations for intraday oil and gold purchases continue to be relevant. Yesterday's data on US oil reserves unexpectedly showed an increase in reserves by 2.8 million barrels (analysts expected a decline by 2.5 million), what a little spoiled the mood of its buyers. But we still do not see a real threat to oil.
About our other trading ideas, we recommend paying attention to buying EURUSD, selling USDCAD, and selling Russian ruble.
Important day for the pound and The New American Energy EraToday, the most interesting things will happen in the Parliament of Great Britain. Recall Parliament took control of Brexit on Monday. Today is the day when the fate of the Brexit strategy can be decided. Moreover, the range of alternatives is more than diverse: from exiting without a deal to canceling Brexit. Accordingly, the “reaction” of the pound might be very different. We have our own opinion on this. we are in a hurry to share with our readers.
So, possible options include: a second referendum, a decision to stay in the EU, a decision to leave the EU without a deal, or the cancellation of Brexit. The last option seems to us extremely unlikely, since the Parliamentarians have already voted against it. This is the only option in which the pound is guaranteed to fall.
All other options suggest its growth. The most interesting and exciting is the decision to hold a second referendum. Although votes in his support may not be enough. Voting for the cancellation of Brexit is also a rather interesting option, but again, rather dubious. The most likely we see further inhibition of the process in one way or another.
An important nuance of today's voting - they are indicative. That is optional for execution by the Government. Theresa May can even ignore them. But on the other hand, there is so little time left that the option that has scored the most votes “in favor” may well be chosen as the base one.
We recommend buying a pound. But racing is possible in both directions. For example, parliamentarians vote for a second referendum - in this case the pound will sharply go up, but then Theresa May will “ban” this initiative, and the pound will bounce down dramatically. These slides can be used for earnings.
Another quite interesting statement recently was noted by US Energy Secretary Rick Perry, who said that the world is entering a new "American energy era." It's difficult to argue with him. If 3-4 years ago nobody could even think about exporting oil from the USA, today the country exports over 3 million barrels per day, increasing export volumes by almost 100% per year. By 2020, oil export from the United States is expected to reach 5 million barrels per day (an increase of 70% from current volumes).
To understand what the figure of 5 million b / d for the oil market means, we note that from all OPEC countries only Saudi Arabia exports large volumes. The US plans over the next 5 years to overtake Russia in terms of exports and become the world's second-largest oil exporter with a volume of over 9 million b / d (after Saudi Arabia). Looking at these statistics, it's difficult not to agree with the US Energy Secretary. So globally and strategically, oil is worth selling. But here and now, in the current term, we recommend buying oil on the intraday basis. Since the current situation in the light of the actions of OPEC + No. 2, the problems of Venezuela are still on the buying “side”.
What the market expects from the fed ?Macro view
The market expected that the FED on this occasion would not change the value of the interest rate. This had already been discounted in previous sessions. At a fundamental level, the US economy is undergoing a slowdown due also to the shutdown and this, together with the unclear monetary policy, is causing uncertainty. Investors want to see if this aggressive monetary policy can continue or if a period of stalemate has begun. The possibility of a rate cut if the situation remains stagnant.
Rates
For now it is very likely that interest rates can be resumed in the next FED meetings, as the indicators on which the FOMC is based are aimed at this. The rates can be cut towards the end of 2019 if the market does not liked this monetary tightening. This hypothesis would lead the indices to follow the strongly bearish December trend.
Index
At this time DOW JONES, (like SP500 and NASDAQ) tested the respective resistance area and was rejected downwards. The target to which it will aim in the very short term (if Powell makes it clear that there will be further increases soon) will be the area set at 25000 points, then continue towards 24200 if the level just mentioned should have been violated to the downside. The same goes for SP500, which will target 2640 points. The NASDAQ should go back to testing the 6900.
Will Great Britain ever leave the European Union? Let's discuss A short rise before...
The price of the FTSE100 broke the resistance on the upside: now is destined to go to test the key level identified by the 23.6% Fibonacci retracement place to 7340 points. From here the possibilities that continues upward past him and confirming a weekly close above are relatively low; it is more probable that, once it is brought close to that level, it reverses bringing itself again in area 7100 points.
London: in or out ?
The fundamental scenario remains unchanged: investors and markets are still trying to understand how the "Brexit" issue will develop, as for now it is not yet clear when and if Britain will actually leave the European Union. On Wednesday Prime Minister May will bring his agreement to the parliament: if he is rejected for the third time, there may be a scenario that seemed remote a few weeks month ago: the request by the EU to postpone this exit. To conclude, Theresa May said that if Parliament does not support the Brexit agreement, there is the possibility that Britain "will not leave the EU for many months, perhaps never". We will await Wednesday's developments.
FTSE100: NO DEAL BABY The technical side
The price has reached the EMA200 daily, key dynamic resistance for the continuation of the trend: an upward break would bring the price directly into the upper area between 7330 and 7520 points; a rejected, however, will return it to test the 6900 points.
The result of a " no deal " Brexit
In the last three sessions it seems that this second hypothesis is becoming the most plausible one: the fundamental scenario remains strongly bearish both for the English index and for the pound as for now the exit from the EU with a "No Deal", without agreement between London and Brussels, seems to be the most likely option. This will entail a series of negative consequences both at the bureaucratic and institutional level, but above all at the economic level.
Our target!
We remain strongly convinced that, if there were no significant changes, the target of the FTSE 100 from now to a month is the support placed at about 6700 points and in the short term will lateralize between 6700 and 6900 points.
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BREXIT CALLINGWeeks ago Brexit seemed to be at an end. Maybe now is Theresa May's leadership's sinking.
Buyers took the ball or is it still sellers game?
Breach looks like done, but what about that recent high at 0.894? Can it resist at the government uncertainty?
Buy signals on track.
Next will be a key-week for UK and May future.
6600 before going to hell? Bart patterns and such a manipulation is going on, we may bounce back a bit and then go straight forward to 6600. In previous analysis we did not hit the support levels which was 30% chance, but going above 6360 as i mentioned with 6400 breakout (My sl tooked) This may change a game for a short time only.. Or we may see another bart thing on the 6600 ? I could wait for a little bounce back to long 6380 level with even closer stop loss like 6365 with bigger laverage .
Bitcoin May 2018 roadmap....born to be wild! [BTFD]Bitcoin by design is controversial, disruptive, progressive and certainly one of the hottest financial instruments known to the trading world since it began.... bitcoin was born to be wild!!!!
We want to get a good idea of where BTC is headed in May 2018 so...
We have the fib levels and some supply and demand zones so we can get a good idea of the bounces and major support and resistance levels
currently at time of writing this we just peaked at 9960 and currently testing support at 9200 area, currently following the gann fan trend support line above the 2/1 area
8500 area is the key support and if this level breaks we could see some more bearish undertones emerging and a possible head towards feb/april lows
im pretty bullish on bitcoin, not full bull yet still cautious but optimistic on good gains and scalps to be had in May, im not seeing the push onto the ath yet maybe june or july after we see some hard and soild bull action bringing the bitcoin momentum up and over key support levels of 10k, 11800 & 12600
for clearer sign upwards wait for the price to close above the red triangle and head towards 11k
have a great month of May and see u in the BTFD group chat
peace up!
Nifty May Hi
Nifty is currently at good range holding above 10700 points. If nifty breaks down below 10615 an immediate correction to 10450-10580 is possible
1) Positive results in Karnataka elections can take nifty above 10800 and 10900
2) Any negative result would effect nifty to take the second leg corrections from 10615
Please keep elections in mind and take two legs in nifty.
Happy trading
Regards
Dinesh