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What to expect this week: main events and our recommendationsThe volatility in the foreign exchange market reached its minimum in recent years. The VIX Fear Index was also confidently at the bottom. The absence of significant events entailed the absence of strong movements in the foreign exchange market. Friday perhaps was the exception. Another weak statistics from the Eurozone and the UK contributed to the activation of sellers of the euro and the pound. The main concern for the markets was the adoption by the US Congress of an act in support of protesters in Hong Kong. China reacted extremely painfully to this, considering it was interference in its internal affairs. And since the first phase of the trade deal between the US and China is already at the finish line, this could potentially lead to the disruption of the deal. But on Friday, Trump said he would veto the bill. In the USA, in the meantime, the impeachment process continues, which in itself is a kind of guarantee against a sharp rise in the dollar value in the foreign exchange market. So, despite the activation of buyers of the dollar on Friday and sellers of safe-haven assets against the background of such news, we still see no reason to revise our trading preferences. And on Monday we will buy the pound and the euro against the US dollar, and we will also buy gold and the Japanese yen. Rising oil prices stopped on Friday, as we expected, our recommendation to sell oil has become even more relevant. Do not forget to sell the Russian ruble as well. As for the upcoming week, it has a chance to become low-volatility. Data on US GDP is formally extremely important, but it will be a revised value, that is, the probability of surprise appear is low.
Long
by Trade24Fx
How to make money on a pound and what to do with oilThe situation in Hong Kong continues to escalate. Trump promises to sign a scandalous law to support demonstrators, which is extremely describing China. And although the US and China declare progress in the negotiations, in such conditions, it can break at any moment. So we continue to look for points for purchases of gold and the Japanese yen. As for the other news - the impeachment process continues in the USA, the UK is preparing for the elections and Saudi Arabia for the IPO Saudi Aramco. In light of the upcoming elections and the uncertainty with its outcome, we can’t count on the growth or decline of the pound in the next couple of weeks. But on the other hand, understanding this opens the doors for aggressive intraday trading without explicit preferences. So, we are armed with hourly oscillators and actively trade GBPUSD. Oil has grown quite well over the past couple of days amid information about rising oil reserves in the US, as well as increased tensions in the Middle East. These events are not one of those that can significantly change the balance of power in the market. So Friday looks like a great day for oil sales. First of all, we are waiting for business activity indices to be published in the Eurozone, the UK and the USA. Also, pay attention to retail sales in Canada, as well as the speech of the new head of the ECB Lagarde. Given that markets are now very sensitive to macroeconomic statistics, even relatively minor data can trigger a surge in volatility. Well, from the new head of the ECB, her vision of monetary policy in the Eurozone has long been expected.
FOREXCOM:XAUUSDLong
by Trade24Fx
Hong Kong as a black swan and its consequences, FOMC protocolThe other day we wrote about the calm prevailing in the financial markets and the absence of “black swans”, which can turn the situation upside down and provoke a sharp surge of volatility. Judging by how events are developing, Hong Kong could become such a “game-changer”. And the point here is not even the intensification of protest activity in the country and its transition to the bloody phase of the confrontation, but the reaction of the world to these events. In particular, the US Senate passed a bill in support of demonstrators in Hong Kong. Since the events in Hong Kong are extremely important for China, they view such US actions as extremely hostile and painful. In particular, China said it would retaliate. All this happens on the eve of the final rounds of the first phase of negotiations between the US and China, the positive outcome of which is already included in current market prices. So the aggravation of the situation may well provoke a breakdown in the negotiation process, and we will return to the situation when countries actively exchange new tariffs, that is, to intensify trade wars. Although this scenario is relatively unlikely, you should not write it off. Moreover, investors are already trying to discount under a possible negative, and the press is beginning to "disperse" this topic. Accordingly, our recommendations for buying safe-haven assets continue to be relevant. In general, in which we note that a critical mass of reasons to start a full-fledged financial crisis has already been formed and the whole issue is in the trigger. The conflict between the two largest economies in the world - what could be the best candidate for the role of a catalyst? The United States yesterday reported good statistics on the real estate market (building permits grew in October by 5% with a forecast of a decline of 0.4%), but the ongoing hearing about the impeachment of Trump does not give traders a reason to concentrate on buying the dollar. FOMC protocols have given little to the markets in terms of understanding the Fed’s future moves. A pause is a current vector in betting policy. Our position on the dollar remains unchanged: we are looking for points for its sales. Moreover, every day such opportunities appear in one or the other pair. For example, a pair of USDCAD was a good substitute.
Short
by Trade24Fx
FOMC protocols & stormBlack swans did not fly by, and there were no important macroeconomic statistics or news injections either on the financial markets. In general, the lull that has lately reigned in the financial markets is lingering and the silence begins to become painful. Usually, it all ends with a storm. But a storm needs a trigger. For example, Trump’s next demarche and the failure of negotiations between the US and China with a sharp intensification of trade wars. But so far, markets do not believe in such a scenario. Goldman Sachs Group analysts predict the extinction of friction between the United States and China in 2020, and the WTO predicts the intensification of global trade next year: if by the end of 2019, world trade is expected to grow at 1.2%, then in 2020 WTO experts are counting on an increase of 2.7%. The dynamics of the VIX Index (Fear Index) is located in the area of historic lows. According to Deutsche Bank estimates, the currency market volatility for the major G10 currency pairs is at its lowest level over the past 45 years. The last time this happened only twice in the past - during 2007 and 2014. Nevertheless, the calmer the financial markets look and the more optimistic the forecasts of financial analysts sound, the more worrying it becomes for us since all these are signs of an impending storm. In this regard, our confidence in the advisability of medium-term purchases of safe-haven assets is growing stronger every day. But once again, we note that within the day, gold or the Japanese yen may well decline, especially if positive news from the trade negotiations appear. Today promises to be more interesting than Tuesday. Because inflation statistics for Canada will be published, as well as FOMC protocols. Given that the next Fed’s actions are not what we can predict now, the markets will study with interest in the text of the last FOMC meeting. Our position on the dollar, meanwhile, is unchanged: we believe that the threat/opportunity balance for the dollar has now shifted towards threats and will continue to look for points for its sales in the foreign exchange market.
FX:NGASShort
by Trade24Fx
Trump helps safe havens and puts pressure on the dollarYesterday against the positive comments from the US and China regarding trade negotiations, safe-haven assets were under pressure. That is not surprising. Recall our position on gold and the Japanese yen – is to buy, however, now we should trade with an eye to a possible surge of optimism in the financial markets against the background of breaking news from Washington. Nevertheless, such descents of safe-haven assets should be tried to be used for short-term speculative trading with small stops. Yesterday is a vivid confirmation of this. The meeting between Trump and Fed Chairman Jerome Powell provoked the sale of the dollar in the foreign exchange market and led to an increase in gold prices. The reason is Trump's comments on negative rates and a strong dollar, which were discussed at the meeting. So there is nothing new: Trump consistently opposed the strong dollar and ultra-low rates. So nothing extraordinary happened yesterday. Another important news is the information about the IPO Saudi Aramco - on the one hand, it is the largest public offering in history (company's capitalization), and in addition, this event is important for the oil market. So, $ 2 trillion of capitalization seems to remain in the dreams of the Crown Prince of Saudi Arabia. Preliminary estimates are $ 1.6- $ 1.7 trillion. Which, however, will still make the company the most expensive in the world. Regarding the situation in the oil market, despite the desire of the Saudis to conduct an IPO in the most favorable conditions (rising oil prices), as well as the continued decline in the number of active oil wells in the United States, we believe that current oil prices are close to extreme for of these conditions, which means we will sell oil both on the intraday basis and in the medium term. But do not forget about the stops. A breakthrough in negotiations between the US and China could provoke not only sales in safe-haven assets, but also an increase in oil prices. Our other trading preferences are unchanged - the Russian ruble can and should be sold. The US dollar is also interesting enough to open short positions, especially after yesterday's sales. The pound feels rather confident in the foreign exchange market in light of the growing confidence of the markets in the victory of the Johnson party in the elections, but we are interested in its purchases on the slopes, and not along the way. So we will wait until the pound is substituted, and only then buy it.
FOREXCOM:XAUUSDLong
by Trade24Fx
Hindenburg omen and US stock market crashWe continue writing a series of posts on the possible collapse of the US stock market. We have already written about the gigantic gap that formed between the growth rate of the US stock market (especially its technological sector) and the growth rate of the country's economy. This is a classic example of the formation beginning of a price bubble, which, at the end - collapses. Today we’ll talk about a specific indicator of the onset of the crisis, the “Hindenburg Omen”. The indicator is named after the disaster of the German airship Hindenburg, which crashed in the American city of Lakehurst in 1937. The essence of the indicator is that it monitors the ratio of the number of securities that updated 52-week highs to the number of securities that show 52-week low. That is, part of the securities is decreasing in price, while a part is growing. The increase in the number of securities that fall in aprice above a certain mark (a fraction of the total number of shares) is a rather alarming signal (such signals are called "Hindenburg exchange"), which may indicate the stock market’s collapse. The “Hindenburg Omen” signals not only about a change in the market phase from bullish to bearish, but about the upcoming stock market crash. Each significant sale in the US stock market over the last 30 years has been preceded by the appearance of “Hindenburg Omen”. The classic identification criteria for the Hindenburg Omen are as follows: 1. The number of new 52-week daily highs and lows simultaneously exceeds a certain threshold (2% -3% of the total number of companies in the listing), with the number of highs is lower than the number of lows 2. The stock index is higher than it was 50 days ago (10-week yield is growing). Recently, in the dynamics of the high-tech sector of the US stock market, “Hindenburg Omen” are increasingly found: the index shows historic highs, but less than half of the components of the index trade above their 52-week highs. Over the past 15 years, this has happened only twice: in 2007 and 2014. That is, we have another signal in favor of the fact that the stock bubble in the US stock market may burst very soon.
NASDAQ:NDAQShort
by Trade24Fx
Powell breaks taboo & opens a Pandora's boxThis week Fed Chairman Jerome Powell was speaking to Congress. He the things that may modify the state of the foreign exchange market. It is not about the Fed rates and the monetary policy vector, but about problems that have been trying not to talk about, because attracting attention to them is a very risky idea. We are talking about the so-called “three Ds” which are major US problems and precisely because of which it can collapse into the abyss. They are Government Debt, Budget Deficit, Trade Balance Deficit. In our reviews, we have already mentioned that more than once. The markets preferred to remain silent about “three Ds” existence since this is a time bomb for the US economy It's only a matter of time before it detonates. The US debt exceeds GDP and reached $ 24 trillion, the budget deficit is about a trillion dollars a year, the negative balance of export surplus on an annualized basis has exceeded $ 0.5 trillion. These figures also tend to deteriorate, since the construction of the pyramid of public debt in such conditions is inevitable and sooner or later it will collapse. Sum up, the dollar and the US economy will be under ruins. Therefore the markets are trying not to think about it. However, this week, Powell upset the stability and attracted the attention of markets to the problems of public debt and budget deficits, noting that without their fundamental decision, the US won't help any Fed action. The current rate leaves very little chance for the action of the Central Bank in the event of a crisis. Powell admitted that this time the Fed is unlikely to be able to pull the United States out of depression, as it was in 2007-2009. Focusing on the “three Ds” is a very bad signal for the dollar. If the markets turn their attention to these problems, the dollar may begin a very protracted decline, the bottom of which is simply not visible from the current height. So, our position to sell the dollar has only received additional argumentation. It is worth noting the positive statistics on German GDP. Positive because the country escaped the recession and was able to demonstrate even minimal, but still GDP growth (0.1% with the forecast of -0.1%). The eurozone as a whole also showed GDP growth (0.2% with the forecast of 0.1%). In this light, the current price of the euro seems quite attractive for us to purchase it. The variation of the hundred points is permissible. Remember set up small stops. The pound ignored weak macroeconomic statistics (retail sales appeared worse than expected in the negative zone). Which once again confirms our recommendation to buy a pound at the earliest opportunity. The only threat to the pound is Brexit. But from this side, problems should not be expected until the election results are announced. So we continue to look for points to buy the pound. China showed weak data. Which again renewed the purchase of safe-haven assets. Nevertheless, buying gold or the Japanese yen you should be careful, since any positive news regarding the negotiations between the US and China may stimulate local sales in safe-haven assets.
TVC:DXYShort
by Trade24Fx
Trump attacks Fed, UBS expects pound to riseUnfortunate week for oil buyers. Following the news about a possible increase in supply and weak demand growth in the future, as well as Morgan Stanley's forecasts about a 25-30% reduction in market prices. Another disappointing news. The agency’s World Energy Outlook (WEO), published that oil demand peaks within the next 10 years. Recall that this week Saudi Aramco gave the oil market 20 years. According to IEA analysts, the current growth in oil demand will last for 5 years maximum, and then we will see a significant slowdown. We are talking about long-term forecasts, so now oil may well ignore these estimates. But in general, the future of the oil market looks rather unsightly. As for yesterday’s oil growth, it was largely due to verbal interventions by the OPEC Secretary-General, who tried to smooth out the effect of the above-mentioned news. In particular, he said that in 2020 growth in oil demand could beat forecasts, oil supply from non-OPEC producers could decline sharply soon. Despite the growth of oil yesterday, taking into account current prices in the market, we continue to recommend selling the asset. Also, despite the strengthening over the last couple of weeks, we recommend selling the dollar. The further fate of the Fed rates is still in limbo, but the further decline will be a strong hit to the dollar. In this light, Trump's next attack on the Fed was quite remarkable. The US President accused the Central Bank and Powell of slowing down the economic development in the States. The Fed, unlike other leading central banks, did not want to divert rates into the negative zone, which harmed the US economy. Such information at a time of the impeachment procedure, Trump gives reasons for the sale of the dollar. Moreover, you can sell it against euro, pound or Japanese yen. Also, the Canadian dollar in the region of 1.33 seems to be a good candidate for buying USDCAD (we are talking about the sales of this pair). The British pound is another excellent candidate for purchases against the dollar. We have already noted that in conditions of an almost complete absence of risks of a “no-deal” exit, the current prices for the pound seem to us underestimated by at least 500-1000 points. According to the updated forecasts from UBS, our estimates are still very conservative. Since bank analysts see the pound paired with the dollar in the region of 1.54 over the next three years. Since we are interested in the time horizon in months, not years, the achievement of 1.40 with GBPUSD will completely satisfy us. Returning to the situation with the dollar, we note that yesterday's data on consumer inflation in the US as turned out to be rather neutral and did not change the existing situation in the foreign exchange market. Today we are waiting for GDP data in the Eurozone and Germany, as well as for retail sales in the UK. Besides, the attention of the markets will be riveted to the speech of Fed Chairman Jerome Powell to the US Congress.
Long
by Trade24Fx
Morgan Stanley warns, Powell & inflation under scrutinyThe current week is full of informational events around the oil market. Which continues to play into the hands of sellers. Yesterday, for example, Morgan Stanley analysts warned that if OPEC + participants at their next meeting on December 5 do not announce a higher reduction in production (current volumes of 1.2 million barrels), then Brent quotes will drop to $ 45 (now the price is around 62). That is, the scale of the fall will be about 25-30%. The chances of a new agreement are small, since countries that are not members of OPEC + are increasing production, so it’s not worth counting on the fact that Cartel members will aloud another loses. Accordingly, the downward pressure on oil quotes in December may increase sharply. Recall that this week we revised our intraday asset position and again recommend oil sales. And a few words about the oil market, but in the context of our recommendation to sell the ruble. According to Saudi Aramco, the cost of producing a barrel of oil in Russia exceeds $ 40, two times more compared with Saudi Arabia, and in general, is one of the highest rates in the world (even higher than in the UK and the USA). That is, Russia is one of the most vulnerable countries in the world for falling oil prices. That is why we recommend the sale of the Russian ruble. Meanwhile, ZEW data for the Eurozone as a whole and Germany, in particular, show that economic expectations are still pessimistic, so yesterday's downward pressure on the euro is understandable. The pound reacted quite positively to the statistics on the labour market in the UK, but yesterday there were no strong movements in pound pairs. We continue to wait for news from the Brexit, but for now, there is none - we work with the pound without obvious preferences on the intraday basis - you can buy or sell it, also use the oversold/overbought time zones as guidelines. Today, the reason for the pound volatility jump may be inflation statistics. Given that at the last meeting of the Bank of England Monetary Policy Committee, two members spoke out in favour of lowering the rate, weak inflation data could well trigger a pound decline. We recommend using this for cheaper purchases. Also, data on consumer inflation will be published in the United States. It will be interesting in the context of the fact that in the evening Fed Chairman Jerome Powell will speak to the Congress. The markets are now very concerned about what the Fed is going to do next. The current consensus is a pause in the Fed's actions. But any Powell's allusions to the possibility of an early rate cut will almost certainly provoke a dollar sale in the foreign exchange market.
FX:USOILShort
by Trade24Fx
Bad for oil and good for poundYesterday marked of news regarding the oil market and its prospects. Moreover, this news has a one-sided impact in terms of the impact on oil quotes. On the supply side, we have a message about the discovery of a huge oil field in Iran. It is about 50 billion barrels. To understand if it is a lot, let’s have a look at the statistics. Proved oil reserves in Iran rank fourth largest in the world (150 billion barrels). Accordingly, 50 billion = 30% will be added to existing stocks. That is a lot. It should be noted that while Iran is under sanctions, that is an accumulated potential than a real injection of additional supply on the market. But from the perspective of a market development strategy, the signal is undoubtedly bearish. Especially when you consider the news that Global oil demand may peak within the next 20 years, according to an assessment included in the prospectus for Saudi Aramco's initial public offering and, and further it will only decline. This news does not solve much in terms of supply/demand. But the prospects look extremely alarming for oil buyers. Sum up, in the short term, this news does not have that much impact. But in the long term, the oil market looks increasingly vulnerable. Knowing the markets and their general timidity, we will refrain from buying oil at current prices and will prefer its sales on the intraday basis this week. Until it becomes clear that investors and traders are fully aware of the situation. Yesterday, the foreign exchange market was relatively calm. The only exception is the British pound. Moreover, the reason for its splash was not macroeconomic statistics, which would be logical, since the data were published very important (GDP and industrial production), but traditionally news regarding Brexit. Nigel Farage has said the Brexit party will not field any candidates against the Conservatives in the 317 seats they won at the last general election. Motivation is the desire to prevent a second referendum on Brexit. The pound on this news naturally grew, since the chances of a “soft” Brexit increased. However, we believe that in the current political situation, any “scenario” play into the hands of the pound. So its purchases, in our opinion, remain relevant. Our idea is confirmed by yesterday’s reaction of the pound to rather weak macroeconomic statistics. Industrial production in September fell by 0.3% (forecast: -0.1% m / m), and GDP for the third quarter grew by only 0.3% (forecast: + 0.4%), and the state of the trade balance significantly worsened ( -12.541 billion against -10.825 in August). However, the pound has grown steadily We also do not forget to sell the Russian ruble, which again trades above 63.50, hinting that paired with the dollar its next target is 65.
Long
by Trade24Fx
USA and China, Saudi Aramco and Bank of EnglandThe previous week, promised to be relatively calm, however, it turned out to be eventful. Gold and the Japanese yen were under downward pressure. The reason is the progress in negotiations between the US and China as well as the growth of positive market expectations regarding the end of trade wars in the foreseeable future. The main result of the week was the news that the United States and China agreed on a phased cancellation of duties before signing a deal. Another event was a separate decision by the Bank of England to leave the rate unchanged. Markets did not expect two members of the Monetary Policy Committee to be in favour of a rate cut. That triggered a decline in the British pound value. In general, you should not expect strong movements in the pound, because the basic driver of pound value in the last 3 years is Brexit. But it is paused so far. So any movement caused by news not related to UK exit will be limited. Due to the large amounts of macroeconomic statistics, the future of the pound looks very vague. On Monday, data on GDP and industrial production in the UK will be published, on Tuesday - statistics on the labour market, on Wednesday - inflation data, on Thursday the data on retail sales will sum up the week. Since the dynamics of the pound, this week will depend on the output data, we will adjust the positions depending on the nature of the data. At the same time, we do not expect irrationality from the foreign exchange market. That is, weak data will provoke sales in pound pairs, and positive statistics data will be the reason for the growth of the pound. Total, this week in the pound we will act contextually, but we give preference to its purchases. On the other hand, we have a very definite position in the oil market - we will look for points for asset purchases. Saudi Arabia in connection with the impending IPO Saudi Aramco will do anything to ensure the growth of oil prices. Latest data on the number of active oil rigs in the United States (the number has dropped to the lowest marks since April 2017) play into the hands of buyers. So we buy oil on the intraday basis. The goal is the growth up to 60.
Long
by Trade24Fx
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Education
by I0_USD_of_Warren_Buffett
1
US and China buck up markets, Bank of England disagreesThursday was not full in events however we could observe some movements that were mainly focused on safe-haven assets, in which a mass exodus of traders was observed. You do not have to guess what is markets concern about, just look throughout the dynamics of gold or the Japanese yen, you can see is there any progress or not in negotiation between the USA and Sino. Since gold, like the Japanese yen, was sold yesterday, it is clear that something positive happened between the United States and China. Indeed, China and the United States have agreed to tariffs phase-out before the deal to be made. This is a very strong confirmation signal for markets that were expecting the successful completion of the first phase of negotiations by the end of the month. Accordingly, investors relaxed and began to leave the safe-haven assets, which provoked sales in government bond markets and safe-haven assets. In connection with such news, we will wait a while with the purchase of safe-haven assets, since in the short term it is difficult to say how long it will take to work out this fundamental factor. Although in the medium term we remain bulls (gold), and we consider the current decline as an opportunity for cheaper purchases. Progress in trade negotiations contributed to the oil prices growth so that diversification once again proved to be the best ( losses in gold were offset by oil earnings). Well, our recommendation to buy oil continues to be relevant. The Bank of England decided to keep the base rate at the same level. However, the voting results surprised: 7 members of the Monetary Policy Committee spoke in favour of the invariance of the rate, but two of them voted in favour of a cut. Which, of course, was a negative signal for the pound. However, support for 1.2810 has survived. Accordingly, our recommendation to buy GBPUSD on intraday day basis remains valid. But do not forget about the stops, and it does not make any sense to put them largely- the bears may well seize the initiative and take the pair to the bottom 1.27. The euro was not lucky yesterday, industrial production in Germany fell by 0.6% (a 0.4% decline was expected). Given the rather strong downward pressure today, we are more likely to sell the euro than to buy it. But today, instead of pairs with the euro, we will work in pairs with the Canadian dollar. Labour market statistics are likely to lead to a volatility jump. Well, recall that for commodity currencies (which include the Canadian dollar is included), progress in trade negotiations is a positive signal. Yesterday it was ignored by the markets, but it is likely to be worked out today.
Short
by Trade24Fx
Why buying EURUSD is a great chanceLooking at the EURUSD daily chart, it clearly shows that it has come to a very important support level. That is a great reason for its purchasing. The stops are relatively small - about 30-40 points, and the profits, in this case, are about 100 points (the nearest strong resistance is located in the region of 1.1160). That is, purely technically, taking into account adequate money management (the profit margin is 2.5 times higher than the stop value), so that is a nice opportunity for earning. The fundamental background is the only thing that can negatively influence. In our opinion, the situation with the euro does not look hopeless and the chances of supporting 1.1060 are quite large. The Eurozone economy is experiencing tough times. However, yesterday's data on retail sales and business activity in the Eurozone came out better than expected, which is more important that the indicators showed a positive trend: retail sales grew by + 0.1% with a forecast 0%, and the composite PMI index was 50.6 with a forecast 50.2 ( the value of the indicator above 50 indicates an increase in economic and business activity). Against the background of rather weak data, these signals have been extremely positive. Leaving the EU without a deal option is eliminated from the agenda. which is great news for the euro. Against this background, the pound rose by 1000 points. And the euro added only 100-200 points, it means that the euro did not worked out yet. Why should the euro grow because of the information that the “hard” Brexit will not take place? The fact is that Britain’s exit from the EU without a deal is not only about losses for the UK but also multibillion-dollar losses for the Eurozone economy, therefore potentially serious problems for the euro. So the removal of this issue from the agenda is a positive signal in favour of purchases of the euro. Its descent below 1.10 was an attempt to discount under exit without a deal. And since it does not take place, then the euro should return to its original position, to grow. Trade war escalation between the US and the EU is delayed while approaching the end of trade wars between the US and China. For the euro, this is a positive signal. Let us explain: the locomotive of the Eurozone economy is Germany. The German economy is export-dependent, that is, its success/failure is determined by the state of global markets, primarily China. The end of the trade wars between the United States and China will give a powerful impetus to the return of the world economy to the normal statement and one of the first to benefit from this will be Germany. In turn, improving the state of the German economy is improving the state of the Eurozone as a whole. And this is will reflect positively on the euro. So, we do not see serious threats to the euro at the moment. Rather, on the contrary, there are good opportunities for buying exceptionally cheap euros.
Long
by Trade24Fx
Data helps the dollar, optimism in financial marketsIn our previous review, we noted that the publication of the ISM index of business activity in the US services sector will be the main event. The ISM index of business activity in the services sector reached 54.7 in October (analysts expected 53.5, before 52.6). As a result, the USD strengthened. “I think it’s a good time though to pause...and that’s what I am looking to do,” Barkin (non voter)told reporters following a speech to an economic outlook conference in Baltimore was another impulse. It seems that the majority of the Fed feels that way. According to the Chicago Mercantile Exchange, markets also expect a pause until September 2019, the probability that the rate will remain at the level of 1.50% -1.75% exceeds 50%. As for the USD, Tuesday turned out to be rich in bullish signals. Despite this and yesterday’s growth, we do believe that the potential for its further strengthening is limited. Therefore, we will continue to look for points for its sales across the entire spectrum of the foreign exchange market, both on the intraday basis and the medium term. China deal is likely to be signed in November so markets are optimistic about that. The confidence that by the end of this month we will see the first signed agreement is getting stronger, so safe-haven assets weaken and commodity markets grow. Take oil, for example. OPEC sees its oil market share shrinking, Forecasts are generally negative for oil prices - the Cartel expects a significant decrease in oil demand growth in the foreseeable future. However, oil strengthened yesterday at the end of the day - expectations of progress in trade negotiations overcame fears of a surplus in the oil market. So our recommendation to buy oil on the intraday basis remains relevant. As for the safe-haven assets, the downward pressure is increasing, and they are close to hitting the critical points, after that the further reduction in the price of gold and the Japanese yen is quite possible. On the other hand, their current prices look ideal for purchases. So today we will buy gold and the Japanese yen with small stops. Today, in terms of macroeconomic statistics, we are waiting for statistics from the Eurozone (a lot of business activity indices, as well as retail sales data) to come out.
by Trade24Fx
Dollar in danger, trade optimism and commodity markets go upThis week, as we noted yesterday, will not be rich in fundamental events, so markets have focused on the trade war. China deal is likely to be signed in November. Added to this positive news the information that the United States may not set tariffs on imported cars from Europe and Japan. Naturally, the safe-haven assets adjusted against this background. Despite yesterday's decline, we continue to recommend the purchase of gold and the Japanese yen. Entry points based on yesterday have become even more attractive. Therefore we observed the growth in the commodity markets. Recall, we recommend buying oil in the region of $ 60 (brand WTI). Especially when you consider the latest news that the IPO Saudi Aramco is finally completing its long epic. With the current information, on December 11, shares of the company can be offered for trading on the Riyadh Stock Exchange. Returning to the foreign exchange market, we note that the dollar looks less strong in the foreign exchange market. According to the Commodity Futures Trading Commission (CFTC), speculative rates on the growth of the dollar on the Chicago Mercantile Exchange fell by almost two-thirds. Thus, speculators sell the dollar for the second week in a row, and if this trend develops, then in the next reporting period its net position may become short. So we recall our recommendation to sell the US dollar. The sale of USDCAD seems to be promising. According to CFTC, the net long speculative position on the Canadian dollar reached its most bullish level since December 2017. That is, the markets are very aggressive and it is worth to join the general rush. However, sales of the dollar against the yen, the euro and the pound also look quite prospective. As for today, the Reserve Bank of Australia expectedly left the rate unchanged. And the most interesting event in terms of macroeconomic statistics today is the publication of the ISM index of business activity in the US services sector. Also, pay attention to the data on the US trade balance.
Short
by Trade24Fx
Unrealized potential and plans for the futureJapan, Canada and the USA central banks' decisions, U.S. and Eurozone GDP latest statistics, as well as data on the US labour market 7 days latest news. In principle, each event from this list would be enough to fill the average week. As for the political aspect: a signal about possible problems in trade negotiations between the United States and China, the next parliamentary elections in the UK and ongoing impeachment process against Trump. The absence of significant movements in the foreign exchange market last week surprised us. The change of more than 100 points +/- was observed in most pairs. However, we consider this rather as an opportunity for trading, since unrealized potential has accumulated in prices. Accordingly, we plan to take up its implementation in the current week. Perhaps the greatest potential has accumulated in the US dollar. The Fed rate cut (the third in 2019) was unnoticed by the markets. Statistics on the US, which came out last week, although was better than forecasts (GDP and NFP), still made it clear that the general state of the US economy is deteriorating. The USA non-farm payroll (NFP) for instance. + 128K was 50% higher than analysts' forecasts, who expected growth at 85K. It would seem that the dollar should have just soared based on such data. But on the other hand, + 128K is 20-30% worse than the average value for the last couple of years. Also, the ISM index in the US manufacturing sector in October, published on Friday, was 48.3 points only (a value below 50 indicates a decrease in manufacturing activity). In our opinion, the dollar fell following the results of the week should have been much stronger. And since it did not happen last week, it will happen on this one. Therefore, we will continue to look for opportunities for dollar sales in the foreign exchange market. The Canadian dollar is a nice candidate for that. The Bank of Canada left the rate unchanged, that is, the percentage differential between the US dollars and Canada declined. The main Canadian dollar issue was news that the Chinese do not believe in the possibility of a long-term trade deal with the United States, while Trump stays in power. That is concerns about the ongoing trade war. Accordingly, commodity currencies were under pressure. But the value of the safe-haven assets grew: gold and the Japanese yen. We recommended buying them last week and will continue to do so in the current week. Note that under the current conditions, the formation of a trading portfolio, that is, when buying a Canadian dollar, it is advisable to have yen and gold in the list of positions. On Friday The Russian ruble paired with the dollar strengthened quite well and as a result, even closed below 63.50. Formally, it opens the way to further decline to 62.50 area. Despite this, we continue to recommend the USDRUB purchases. Everything goes according to the plan announced by us earlier: the first time of purchases from 63.60, the second one we start at about 62.60. So if someone has not bought a pair, you can do it now purchase at 63.60, and who is already in position should wait for an attempt to hit the 62.50.
Long
by Trade24Fx
Get ready for NFP: our expectations and recommendationsThe Japanese yen steadily strengthened yesterday because of the results of the meeting of the Bank of Japan and news from China. When the Bank of Japan expectedly left the rate unchanged, the Chinese quite unexpectedly announced that they doubted the possibility of a long-term trade deal with President Donald Trump. That is, it is too early to stop worrying about the trade war. Therefore, safe-haven assets, the Japanese yen and gold yesterday were in high demand. Recall that in our review yesterday we recommended buying gold. So congratulations to those readers who follow our recommendations. It is worth noting data on the Eurozone GDP that came out on Thursday. On the one hand, it came out better than expected (+ 0.2% q / q for the forecast + 0.1% q / q), and on the other hand, the growth rate is still extremely close to zero. So there’s nothing much to rejoice about. Moreover, the unemployment rate was higher than expected, and inflation in the Eurozone continues to be rather weak. Not surprisingly, the euro travelled towards the 1.1160 resistance and hit that. The dollar was quoted quite mixed yesterday: against the yen, it fell, but against the euro and the pound - it strengthened. However, the most interesting movement will be today. Recall that data on the US labour market will be published today. Data on unemployment and average hourly wages this Friday will be much less significant. Our expectations for NFP are generally negative. If we compare the situation on the labour market now and a year ago, we can state its serious deterioration. One year ago, we were talking about the average value of the NFP 200K +, but recently it has been in the region of 150K, and the saddest thing for the US economy in all of this is that the indicator shows a clear downward trend. In general, expert forecasts confirm our expectations - the average forecast is 85K. This is more than half the average NFP over the past couple of years. However, the actual data may come out even worse. Over the past 5 months, 3 times the data on the NFP came out worse than forecasts, 1 time the analysts correctly predicted and only 1 time the actual data came out better than the forecast. So the chances are that the data will come out better than forecasts 1 to 5. We see two trading options: riskier and more profitable and less risky, but less profitable. The first option is about to start selling the dollar now in anticipation of weak data we have reasons for this. The US economy is slowing down. Which cannot but affect the state of the labour market. Accordingly, weak data will lead to sales of the dollar in the foreign exchange market. An excellent candidate for the sale is USDCAD. Also, gold purchases look very promising. As for the second option, which is less risky, we are talking about news trading. The bottom line is to work upon the release of the news. Obviously, the movement will be strong and unidirectional. That is, you do not have to guess whether the dollar goes up or down but just get into a position in the direction of movement after the data is released. To do this, we place orders like buy stop and sell stop at 2-3 minutes from the current price at that time 2-3 minutes before the news release. And we are waiting for the news to be published and one of the orders will work out. After that, you just need to be patient and wait. Risks are minimal, and earnings are limited only by your patience and the extent of the reaction of the foreign exchange market to data.
Short
by Trade24Fx
Results of Central Banks, US GDP and ADPLet’s analyze the key events of yesterday. Consumer confidence in the Eurozone is rather depressed, as indeed the entire economy of the Eurozone. But at the same time, the euro did not show any specific movements. The dollar, on the contrary, despite the relatively good statistics, was losing its way. Preliminary data on US GDP for the third quarter came out much better than analysts' forecasts (+ 1.9% y / y with a forecast + 1.6% y / y), consumer spending also showed growth. Employment data from ADP (especially important in anticipation of tomorrow's data on NFP) also higher than expected (+ 125K with a forecast +110 K). Although we note that fact that USD paired with the Canadian dollar strengthened due to the decision of the Bank of Canada to leave the rate unchanged. Therefore the USDCAD provided an excellent opportunity for its sales, as we recommended in yesterday. It means that you can sell it today. The main event of yesterday, of course, was the announcement of the decision of the Federal Open Market Committee. The rate was cut by 0.25%. As a result, the dollar continued to suffer losses in the foreign exchange market. Our recommendation on the dollar remains unchanged - we are looking for points for its sales. Tomorrow we are waiting for the official statistics on the US labour market, which is likely to lead to the formation of a full downtrend. But we will talk about this tomorrow. The Bank of Japan: the rate is unchanged. The press conference of the Central Bank will take place after the publication of this review, so we’ll talk about its results tomorrow. In the meantime, we tend to buy the yen primarily against the dollar. Today we are waiting for the statistics on GDP growth in the Eurozone, data on personal income and expenditure in the United State to come out. Our recommendations for today: sale USDCAD, as well as the dollar as a whole in the foreign exchange market; buy gold and sale the Russian ruble.
Short
by Trade24Fx
Fed’s decision: sell dollar, buy gold & CADBefore moving on to the main event this month, and perhaps the next one too, we will talk about yesterday’s events. As usual, the most interesting news is coming from the UK. Johnson could find support for his idea of an early election. So in December, the British are expected to have the third parliamentary election over four years. According to some experts, they can become a kind of referendum on Brexit. If residents give preference to parties opposed Brexit, then Brexit might be cancelled. Our position on the pound has not changed. On the contrary, we believe even more strongly that the pound will rise. Yesterday its strengthening only confirms our idea. But everything goes to the point that its growth will be delayed by at least a month and a half. Wednesday can be called the main day of the week because today the Bank of Canada and the Fed will announce their decisions on the monetary policy parameters. The results are appearing to be clear, but the foreign exchange market might be wide open with its reaction. So, the Fed with a probability of 95% + will lower the interest rate by 0.25%. Formally, this is a powerful bearish signal for the dollar, as lowering the rate today will be the third in 2019. And this is considered as a trend. The last time the Fed launched a full-fledged rate reduction cycle, the dollar lost about 15% of its value in the foreign exchange market. That is why we will sell the dollar today, despite its stubborn reluctance to decline. As for the Bank of Canada, the rate is likely to remain unchanged. Against the background of a potential Fed’s decision to cut the interest rate, in our opinion, this will be an excellent occasion for a further USDCAD reduction. Therefore, today we will sell it (if the Bank of Canada leaves the rate unchanged, and the Fed lowers the rate). based on technical analysis, of course, it is worth waiting for a breakdown of 1.30 and enter the position below 1,30 right after stop losses execution. Gold looks quite good for purchases in anticipation of the Fed rate cut. Current prices are attractive in their own right, and a decrease in the Fed rate will only add arguments in favour of gold purchases (recall, one of the key problems of gold is the inability of the asset to generate stable income, unlike the dollar in the form of deposit income or purchases of treasury bonds).
TVC:DXYShort
by Trade24Fx
Brexit postponed, last quiet day of the weekThe Brexit date is set to be delayed until 31 January Again. Johnson, as promised, asked parliamentarians to call early elections in December. He has failed to win on Brexit. Johnson said that he would make another attempt today and said that without early elections, it would not be possible to ratify the agreement with the EU. Today will be the last relatively calm day in the foreign exchange market, because on Wednesday the Fed and the Bank of Canada will announce their decisions, on Thursday we expect news from and the Bank of Japan, well, on Friday we are waiting for data on the US labour market to come out. So it will be an extremely interesting and volatile week. But we will talk about these events as they approach. And today we suggest focusing on trading using the stochastic oscillator. That is, we trade without obvious preferences according to the signals from hourly oscillators - we buy in the oversold zone and sell in the overbought zone. But at the same time, we do not try to impose our will on the market and fix our positions with relatively small stops. List of our current trading preferences as follows: selling the dollar, buying gold and the Japanese yen, selling the Russian ruble and buying oil on the intraday basis. -Some of the positions may change their direction, so new prospective options could be added. For example, purchases of the Canadian or Australian dollars against the US dollar. The only thing that keeps us from actively recommending the purchase of commodity currencies is their approach to important levels. The Canadian will have a chance to hit the key support on Wednesday when the results of the meetings of the Bank of Canada and the Fed will be announced. The Australian dollar may take advantage of the possible sale of the US dollar on Wednesday after the Fed’s decision and also gain a foothold above 0.6880.
Long
by Trade24Fx
Get ready for Fed decision, Brexit & bullish oil marketBrexit was accustomed to being the main news generator last week, at least for the pound pairs. Parliament refused to vote for the deal until it made changes to British law, which meant the need to request a postponement. In our opinion, this is just a way to publicly humiliate Johnson, who has repeatedly said that October 31 will be the end date. As a result, Johnson sent a letter to the EU asking for a postponement, but “forgot” to sign it. In the EU, instead of a postponement, decided to wait until the British agreed on something. It is all about the special election. On Monday, this issue will be put to a vote in Parliament. In general, the week will be hot for the pound from its very beginning. Well, the date of October 31 is Thursday of the current week. So get ready for the sharp spike in pound volatility. Generally, we remain bulls on the pound - the issue of leaving without a deal is practically removed from the agenda, so this is a sign for buying the pound. But its decrease by several hundred points against the background of negative news from Parliament / Government of Great Britain or the EU is quite possible. So do not forget to put stops and monitor the news background. The current week for all other participants in financial markets (except the British) will be interesting first of all by announcing the Fed's decision on the interest rate on Wednesday. The current consensus - lowering the interest rate, and then will put the process of changing rates to a pause at least until the end of the year. We’ll talk more about this on Wednesday before the event. Unexpected for the markets Central Bank of Russia decreased the interest rate by 0.5%. Given that the ruble came close to our settlement point No. 1 for the sale of the ruble, we recommend opening long positions in the USDRUB from current prices in the region of 63.60 with a minimum target in the region of 65.20. The second round of purchasing starts at about 62.60. And a few words about the oil market. Formally, our recommendation to buy in the region of 51.20 with goals 56 last week worked out completely. Knowing how events are developing, there is a chance to raise the growth target - oil may well reach 60 (WTI brand). According to Baker Hughes, the number of oil rigs in the United States fell by 17 to 696 units. Thus, their number has fallen to its lowest level over the last 2.5 years. Recall, last week, US oil inventories decreased by 1.7 million barrels. So this week we are looking for points for oil purchases. The goal until the end of the week is 60. But at the same time, do not forget to set up small stops.
FX:USOILLong
by Trade24Fx
ECB waits, economy stagnates, Johnson keeps pound from growingAt yesterday’s meeting, the Governing Council of the European Central Bank (ECB) decided that the interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will remain unchanged. So Draghi can leave with a sense of accomplishment, but his successor Christine Lagarde will have to solve a challenging task - how to stimulate the economy if rates are lower than zero. Yesterday's macroeconomic statistics has been psyching negative thoughts out. The composite PMI index in Germany is below 50 and worse than forecasts, the similar index in the Eurozone as a whole turned out to be above 50, but it came out worse than forecasts, and its recessive values remained only - 0.2. Orders for durable goods in the United States fell by 1.1% m / m in September (forecast: -0.7% m / m), while composite PMI in the United States, although it reached 51.20, is still worse than analysts' forecasts. In general, the economy continues to generate signals in favour of stagnation. Recall recent data on manufacturing activity in Japan, which reached its lowest level over the past 3 years, or China's GDP, which has reached thirty-year lows. Returning to the ECB and its negative rates, I would like to note that regulators are one step away from being stuck when traditional instruments of influence on the economy go off, but there is nothing to replace with. In general, the threat of a global economic catastrophe from a hypothetical opportunity may well become a reality. Well, we recall that during periods of crisis, the investment strategy needs to be radically adjusted: replace investments in stocks with investments in bonds, increase cash in the portfolio and spend part of facilities on the purchase of safe-haven assets. In this light, we continue to recommend buying gold and the Japanese yen. Speaking of threats. Boris Johnson continues to stop the pound from growing. His intention to hold early elections in December is becoming real. On Monday, this issue will be put to a vote in Parliament. And if the EU by that time manages to agree on a postpone on Brexit, then the opposition is ready to vote “in favour”, which means that early parliamentary elections are waiting for Britain in December.
Long
by Trade24Fx