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The break goes on, commodity currencies and the pound purchases The break is going on. Bursts of volatility are observed in pound pairs (just after the last two volatile weeks, this activity seems to be increased only against the background of other currencies standing still). This contributes to both the accumulated fatigue after full of events weeks and the lack of important news. Justin Trudeau has won a second term as Canada’s prime minister after the country’s federal election. The news as a whole is positive for Canada in general and the Canadian dollar in particular. However, no one rushed to buy it. Nevertheless, we consider Canadian dollar purchases to be a rather prospective trading idea, despite the strong oversold of USDCAD and rather weak data on retail sales in Canada published yesterday (-0.1% with the forecast a + 0.4% rise). So today we will look for points for sales of USDCAD. Since we are talking about commodity currencies, we want to draw the attention of our readers to AUDUSD. If today it can gain a foothold above 0.6880-0.6890, this will be an excellent occasion to open long positions with a minimum target in the region of 0.7020. Note that in the light of progress in the negotiations between the US and China, trading currencies, which include the Australian and Canadian dollars, actively work out latest losses and, on the whole, seem quite prospective. Another good trading idea. Descents of 150-200 +/- points should be used to buy the GBPUSD. Remember, set stops because, at any moment, Brexit news may provoke bursts of volatility. Speaking of Brexit and the reason for pound’s fall. The main question that plagued the markets can Boris Johnson 'get Brexit done' by October 31? Recall that we predicted that he could not, but in the end, everything would be okay. On the one hand, the Parliament made it clear that it was ready to support the agreement. On the other hand, there is no way to be in time before October 31. In addition to the statistics on retail sales in Canada, yesterday was remembered for its still weak data on the US real estate market (Sales of existing homes in September fell by 2.2%, while analysts forecast a 0.7% decrease). In this light, we once again recall our recommendation to focus on looking for points for the US dollar purchase. In addition to commodity currencies and the pound, safe-haven assets (gold and the Japanese yen) are well suited for this.
by Trade24Fx
Markets took a break, pound tested 1.30"Markets took a break" the lack of high-profile news and frankly difficult weeks contributed to that yesterday. GBP has tested 1.30 against the dollar. As we expected unsuccessfully since a successful test requires positive news from Britain. Johnson’s attempt to accelerate the negotiation process did not bring home the bacon. Parliament refused to re-vote on the approval of the agreement. Motivation: the decision was already made on Saturday and it makes no sense to discuss the same thing again. However, Johnson does not give up trying to take the UK out of the EU on 31 October. We are rather sceptical about this and are waiting for a delay for another 2-3 months. Nevertheless, the general feeling of further leaving hangs in the air, so buying pounds in the daily lows area still seems to us to be a good trading idea. In the end, the growth potential has not yet been exhausted. Another promising idea, in our opinion, is the sale of the dollar. But recently, we see more and more reasons to start a downward dollar rally: rates in the US are falling, economic indicators are deteriorating, US exporters continue to suffer due to a strong dollar (in the current reporting season, at least 16 leading companies have complained about problems with profit due to for a strong dollar), in addition and do not forget about the structural problems of the US economy (public debt, chronic trade deficit and trillion budget deficit). So we will continue to look for points for selling the dollar in the foreign exchange market. Canadian retail sales figures are what we are waiting to come out. Especially because the Canadian dollar has recently strengthened in the foreign exchange market. On the one hand, the Canadian dollar may still grow. On the other hand, weak data on the background of a rather strong overbought Canadian dollar may well give a signal for fixing profits and starting correction in pairs with the Canadian dollar. We are closely watching the news.
Long
by Trade24Fx
UK Verdict, our recommendations and plansA new version of the Brexit deal has been agreed between the EU and the UK. The pound added about 500 points by the end of the week, bringing the account of its achievements to almost 1000 points. Recall that the UK and the EU, as we predicted, were able to agree on the terms of the deal at the last moment. As a result, at the EU summit on Thursday, this deal was approved by Europe. Another problem appeared - Johnson does not have a majority in Parliament. Accordingly, he had pretty high chances to repeat the fate of his predecessor, Theresa May, who also agreed on the deal, but could not pass it through Parliament. On Saturday, a vote took place, following which the British Parliament ordered Johnson to ask for a 3-month postpone so that parliamentarians could bring its legislation into line with the new realities. Johnson, who says more than once that there will be no postpone. Thus, he was put in a rather uncomfortable position. In general, there is a feeling that such a vote is rather an attempt to publicly humiliate Johnson, rather than a really necessary thing to do. Nevertheless, Johnson sent an unsigned letter to the European Union on Saturday requesting a Brexit delay. At the same time, he sent a couple of letters to the EU (which he did not forget to sign), in one of them he says that he is against the postponement. This week we will continue to look for points for its purchases because the Brexit issue has not been solved yet. Therefore there is still potential for the pound to grow. It is worth noting the weak statistics for the United States and China, which only confirmed what has been clear for a long time: trade war cause real harm to everyone. No breakthroughs were observed regarding the end of them. In this regard, we recommended focusing on finding entry points for the purchase of safe-haven assets. Given the state of financial markets at the beginning of the week, we see no reason to revise our recommendations and this week we will continue to look for points for buying gold and the Japanese yen. As for the euro. Technically you need to buy EURUSD, we recommend doing it with an eye on Thursday. The ECB will announce its decision on the parameters of monetary policy in the Eurozone on Thursday. Most likely, there will be no changes, but given the general weakness of the Eurozone economy, we will not be surprised at the “dovish” comments from the Central Bank or even the expansion of measures to soften the monetary policy, which may well provoke euro sales. The oil market was relatively calm last week. And although the Middle East continues to resemble a powder keg (Turkish military operation in Syria, an attack on an Iranian tanker, etc.), so far the markets are trying to ignore it. Last week, reserves increased by almost 10 million barrels - the maximum value since April 2019. Saudi Aramco has postponed the launch of its long-awaited initial public offering on Sunday. And although there is no direct connection between this event and the state of the oil market, in general, this is a rather bearish signal. As for our position, it is generally unchanged, while oil (WTI brand) is higher than 51.20, we tend to buy oil.
Long
by Trade24Fx
The supreme test of pound, China's GDP & US retail salesYesterday Brexit turned a corner. The Prime Minister got the European Union to renegotiate the Withdrawal Agreement that the EU said to would never renegotiate. The British pound, as we expected, hit a fresh five-month high above 1.30. But after that, many buyers decided to take profits, resulting in a rebound of the pound more than 150 points down. The reason for taking profit was both about 1000 points per week, which, for example, could be earned in the GBPUSD, and fears that Brexit deal might fail again. Parliament is expected to sit on Saturday in what could be one of the most important Commons’ sessions of the entire Brexit process. Recall ones the agreement between the EU and Great Britain was already agreed, but the country's parliament voted “against”, as a result, Teresa May resigned and everything had to start all over again. If the story repeats, then the further development of events can be quite unpredictable. That is why many decided to take profits, and it is difficult to blame them. The fact is that the current version of the treaty doesn’t quite satisfy the Irish Democratic Party. And without their support, Johnson is unlikely to gain enough votes. As for our position, so far it is unchanged. We consider such bounces of 150 points as an excellent opportunity for purchasing. If the Parliament votes “for”, the pound will simply be doomed to further growth. It will be 200-300 points or 1000 is difficult to say, but pound purchases will live up to. If Boris fails that will certainly trigger massive sales in pound pairs. This option must be borne in mind and do not forget to put stops. You can safely sell the pound if he loses. The US, meanwhile, continues to show weak macroeconomic statistics. Yesterday, data on industrial production not only came out worse than forecasts below 0. The statistics on the real estate market did not please either. In general, we see an increasing number of reasons for the sale of the dollar. And today we continue to look for points to open short positions on the dollar in the foreign exchange market. Of the other statistical news, it is worth noting today's data on China's GDP. The indicator reached 6% (with a forecast 6.1%). Industrial production growth rates (went above forecasts) and retail sales (within the framework of forecasts, but in a good plus). In this light, our recommendation to buy safe-haven assets continues to be relevant. So today we continue to look for points for purchases of gold, as well as the Japanese yen.
Long
by Trade24Fx
Threats on the horizon, EU summit & hidden intervention of JapanToday we are talking about a possible demarche by the Irish Democratic Party and, accordingly, the text of the treaty that could be not approved. Therefore, the GBP movement stuck. On the one hand, growth needs to be continued, because on brink of Brexit deal, on the other hand, everyone suddenly realized that the deal still has to be approved by the Parliament of Great Britain. This has already happened with Theresa May so the growth of the pound has stopped so far. Also, a positive sign following the results of today's summit of the European Union may well overshadow the concerns for a while. So today we will continue to buy the pound, but with an eye on the outcome of the summit. Its failure will be a sentence for the pound (at least temporary) and it will be sold out. Another rather unexpected threat was the announcement by China that the country is ready for countermeasures if the US Congress provides legislative support to protesters in Hong Kong. Given the already difficult and still incomplete trade negotiations between the United States and China, this could become a stumbling block in resolving trade wars. In the light of such news and market concerns, today we will continue to look for points for safe-haven assets purchase (gold and the Japanese yen). As for the yen decline this week, Goldman Sachs explains its weaknesses with purchases of foreign assets by the Japanese State Pension Investment Fund (GPIF), which put pressure on its currency. But in general, this is a form of hidden currency interventions. Interventions by the Bank of Japan may provoke the United States to ask the Bank questions, but also it seems like there is no manipulation. Worth noting the weak data on US retail sales (-0.3% with the forecast + 0.3%). The dollar naturally was under pressure. Recall that we remain bears, so today we continue to look for points for dollar sales in the foreign exchange market.
Long
by Trade24Fx
Brexit & pound, IMF forecasts and Bank of Japan plansThe pound is a focus of attention of the forex market. Because Brexit is entering final straight. Yesterday the European Commission's chief negotiator Michel Barnier said that Brexit deal within reach in last-ditch talks, but doubts remain. And then there was information that the legally agreed text will be presented to the delegations of the EU and the UK no later than Wednesday morning. On the whole, we cannot but note the positive attitude of the parties, which only strengthens us in the desire to buy the pound. Recall, there is a potential pound value growth. UK labour market data released yesterday (came out pretty weak), once again showed that Brexit is only the pound traders are interested in. So we continue to pay attention to this issue. We still have time for pound purchases at affordable prices, but it is running out. IMF cuts global growth forecast. In 2019, global GDP growth is expected to reach 3% (this is 0.3% lower than the previous IMF forecast), and in 2020 the growth rate will be 3.4% (0.2% lower than the previous forecast). We note that the rate of economic growth in 2019 has been revised to the worst one since the financial crisis of 2008-2009. The IMF noted that the damage from trade wars is equal to the Swiss economy. In general, that is bad news for commodity and stock markets, as well as currencies such as the Canadian and Australian dollars. But good for safe-haven assets buyers. The US decided to hint to Turkey that a ground invasion against Kurdish people might not be the best idea. We are talking about US sanctions against Turkey, announced by Trump, as well as Volkswagen's decision to suspend the construction of an automobile plant in Turkey (price tag $ 1.4 billion). While no reaction from the financial markets to this has followed, we decided to leave our recommendations for the purchase of safe-haven assets (gold and the Japanese yen). So today we will continue to look for intraday long positions to open. Information that the Bank of Japan is preparing to reduce the volume of investments in bonds. The event is nontrivial. 10 years ago the Central Bank did that. We interpret this signal as monetary tightening. The yield increase in the Japanese bond market may well trigger a strengthening of the yen. In this light, our recommendation to buy the yen seems reasonable. Leading global analysts predict target 100 for the USD JPY.
Long
by Trade24Fx
Keeping the peace in a troubled world, IMF forecastsEven though yesterday in Japan, the USA and Canada was a day off on the financial markets we cannot but call that day like a calm one. As it was expected, a mini pound bubble burst. The lack of new positive drivers forced the most impatient to take profits of about 500 points. Plus, fears that the deal will fail again remains relevant. In particular, the EU’s chief Brexit negotiator, Michel Barnier, said that the current version of the deal lacked detail, which could lead to potential time pressure (there is too little time to discuss all the important points - the summit will be held on Thursday). Our recommendation is to buy the GBP remains relevant. Remember about stop loss, because the potential of the pound growth is far from exhausted. It can still grow by 500 or even 1000 points. Today we are waiting for statistics on the UK labour market to come out, which may well trigger a surge of volatility. This should be taken into account when making trading decisions. Safe-haven assets remain relevant yesterday and the recommendation to buy the yen proved its worth. Indeed, there are many reasons for buying safe-haven assets. It would seem that the agreements between the United States and China have somewhat relieved the tension, but if you look at what is happening from another side, facts side, then nothing has been signed, and in general, we are talking only about the first phase of the agreement. That is, mass exiting safe-haven assets on such news would be at least illogical. As for the Middle East. Turkey’s ground military operation in Syria, the attack on the Iranian tanker - although these are links of different chains, they only emphasize how explosive the region is. Against this background, reassuring investors would look very strange. So today we will not only continue to buy the Japanese yen but will also restore our recommendation to buy gold. The reason for the growth of safe-haven assets today may be the IMFforecasts publication on the growth rate of the global economy. If (when) the Fund again lowers its forecasts, the demand for safe-haven assets will have to rise as well as the prices of gold and the Japanese yen. We draw our readers' attention to excellent points for entering a short position on the EURJPY. In this light, our position on oil purchases looks problematic. However, the tension in the Middle East and concerns about the oil supply on the market may well balance the weak forecasts for the growth of the global economy and, accordingly, the fears of weak oil demand in this regard. So while oil above 51.20 we will look for points for its purchases with a target of 55-56 (WTI brand).
Long
by Trade24Fx
Pound records, trade war and attack on Iranian tankerThe United States and China negotiation on trade war took place last week. In just two days by 500 points, the GBP showed a sharp growth regarding Brexit news. Actually, we have been waiting for this for quite some time and note that this growth is not limited. This week, EU summit on Brexit will be held on Thursday. With the positive outcome, the pound may well get another five hundred growth points in the asset. But let's not get ahead: events are still in the process, and the pound remains very vulnerable to negative news. After all, there are no real facts of the arrangements between Johnson and the Irish Prime Minister exist. So any change in negotiation may radically change market sentiment. Our position on the pound remains unchanged. We were sure that there would be no way out without a deal, and we are sure of it. And this is an occasion for buying the pound, even after such impressive growth. Negotiations between the USA and China. According to the current situation, the United States agreed to suspend another increase in tariffs on Chinese goods which is expected to be realized this week. The parties announced progress in the negotiations but did not work out any final agreement. So actually it is a positive news global economy, but again the situation is very precarious. According to Trump, it may take up to five weeks to prepare a final agreement. He acknowledged that the deal could break, but expressed hope that this would not happen. We will wait for a while with gold purchases, but sales of the USDJPY pair look very promising. We place stops above 108.90, profits 106.8 and below. Moreover, the Middle East is again troubled. At the end of the week, the Oil market strengthened. Recall, we recommended buying it in the area of 52 (WTI brand). The reason for the active trading on Friday was information about a missile attack on Iran’s oil tanker. Iran has already stated that the rocket flew in from Saudi Arabia. Given that before this, the Saudis accused Iran of attacking their oil facilities, the conclusions of Iran seem generally logical. We will remind, earlier Saudi Arabia pretended that the incident has been settled, and they will not aggravate the situation and try to take revenge on Iran. Therefore, this week we will continue to recommend oil purchases. Moreover, the goals that we announced last week for purchases have not been achieved yet. More precisely partially achieved (recall, we predicted $ 55- $ 56). Today is a day off in a number of countries, including the United States. Given the extremely unstable news background, this is fraught with explosions of volatility, so today you need to trade with extreme caution.
Long
by Trade24Fx
Brexit breakthrough and markets bet on the breakthrough in US-ChThere were no major breakthroughs at the meeting between UK Prime Minister Boris Johnson and his Irish counterpart Taoiseach Leo Varadkar over the Irish border backstop. Recall that today it is the main sticking point that stops signing an agreement with the EU. As a result, the GBPUSD soared more than 250 points. However, this is not the end so you should not relax. Next week, the EU summit will take place, from which markets are waiting for a final decision on Brexit. Current options for the development of events include an agreement with the UK, another delay or exit without a deal. We have been supporting pound purchases for a long time since we believe in Brexit deal. Negotiations between the USA and China continued to be the hottest one. Trump said the talks went well. Today, Trump will host Liu He, Vice Premier of the State Council of the People's Republic of China, in the White House, so surges in volatility in the financial markets are still likely. The markets seemed to be imbued with Trump's confidence, as demand for the Chinese yuan in the options market sharply increased (over the past 24 hours, traders bought two-month options in the dollar/yuan with a strike at 6.95 for $ 650 million). That is, traders are trying to prepare for the success of the negotiations and are waiting for the renminbi to strengthen. trading decisions have to be made with an eye to a possible change in the existing fundamental background. Regarding our position on safe-haven assets, today we will not recommend buying gold or the Japanese yen. The situation is too unpredictable, and the risks are too high. Our recommendation for today is the adaption to any negotiation outcome. The success of negotiations between the United States and China, in theory, will be accompanied by haven assets sales. Accordingly, you can act respectively, with that. Yesterday, pound dynamics showed that even a late call could bring significant profits. If negotiations fail, you can act respectively purchasing gold and the Japanese yen. In terms of macroeconomic statistics, Employment Change in Canada is what we are interested in. So today is an interesting day to work the Canadian dollar.
Long
by Trade24Fx
Getting ready for a busy day and not going against the marketToday may well be a day of high volatility in the financial markets as a result changes in prices for several financial assets. There are a lot of important macroeconomic statistics will be published today. In particular, a whole block of data will be released across the UK, including GDP in August, industrial production, the index of business activity in the service sector, as well as the trade balance. So at 11-30 in pound pairs most likely it will be intense. As for the unstable pound we recommend practising news trading today. 1-2 minutes before the news release, we place pending stop orders, both for purchase and for sale, at 20-25 points from the current price of GBPUSD at that time. Well, then we just wait. Positive news is likely to provoke a growth, while negative news will lead to sales. Accordingly, one of the pending orders will react. Well, then it is only a matter of time and patience. Apart from data from the UK, inflation statistics from the United States is also we are interested in. Recall, 2% is the Fed’s target, accordingly, while inflation is below this mark, the Fed could cut the rates. We also do not forget that the Central Bank has at its disposal other instruments for expanding/narrowing the money supply. From the latest news, it is worth noting the Federal Reserve will soon purchase of US Treasury bonds. That is, the program to reduce the balance is over and the Fed's balance sheet begins to expand. Yesterday, the minutes of the last FOMC meeting was published. There is no unity in the Fed regarding the monetary policy vector. The distribution of votes “in favour” and “against” the reduction of the rate 50/50. The growth of the dollar supply in the market is a strong bearish signal. So the markets to finally begin to sell off the dollar the confirmation in the form of weak inflation is needed. So today's data is extremely important and can provoke strong movements in dollar pairs. But the main focus of the markets today is on negotiations between the US and China. If they fail, then the safe haven will be very volatile. If negotiations succeed, oil price may soar, while gold and the Japanese yen will be sold off. In this light, the main rule of today is not to go against the market. The movement can be very strong and unidirectional. Accordingly, trading in the direction of travel, especially if there is a fundamental reason for this, is the best option for trading today.
by Trade24Fx
On current market fears, Brexit failure and oil purchasesThis week, markets have completely focused on the negotiation process between the US and China. We will closely monitor as well as the dynamics of safe-haven assets, which fully correlates with a market statement regarding the outcome of the negotiations. It is already obvious that the success of negotiations would affect gold - a decline in the are of 1420 +/- seems very likely. But the failure in the negotiations process with a high probability will end with a re-test of the highs of the beginning of September, that is, 1550. It is difficult to say which variant is more likely. Yesterday, the markets supported the second one. This was evidenced by the dynamics of safe-haven assets, the VIX Fear Index and the general news background - the parties took quite similar positions and whether they can get a compromise is not yet clear. This refers to the news that the US blacklisted 8 Chinese companies, and China in response promised to take the same measures. In general, not the best background for successful negotiations. Total: the situation is developing, but it is extremely favourable for trade in gold and the Japanese yen. Patience and approach from good points practically guarantee earnings. As for the direction, we tend to buy both gold and the Japanese yen. But once again we note: purchases are relevant in the absence of fundamental contraindications. If there is news of a breakthrough in negotiations appears, purchases should be postponed at least until the details are clarified. In addition to the United States and China, the EU and the United Kingdom exchange mutual claims. The negotiation process is also far from a successful end and there is a chance that it would lead to paralysis. Johnson is infuriating the EU. And his last call Merkel, for many created the feeling that there would be no deal. But we continue to believe in common sense and the victory of global economic interests over local personal ambitions. Also, Johnson's failure to make a deal does not mean an automatic exit without a deal. Recall, Parliament obligated him to ask for a postponement if the deal was not agreed before October 17. So the purchase of the pound after yesterday did not become hopeless. Rather the magnitude of risks per position decreased, while profits increased. In the oil market, WTI prices meanwhile have come to basic support around 51.20. Although we are medium-term oil bears, buying with current prices seems like a good deal. The stops - below 51, but the profit set up in the area of 56 (if the correction begins, then this will be its minimum goal). But again, we’ll warn you f breakdown of negotiations between the US and China could hit oil value - in this case, support 51.20 will not stand. So we are acting with an eye on the news background.
Short
by Trade24Fx
US and China getting ready for negotiations, Brexit stuckU.S.-China trade talks kick off again this week. Negotiations between the United States and China are set to begin on Thursday. China is not going to reform industrial policies or government subsidies, that is, wanted to continue to ensure the competitiveness of its products by any means, including not very honest ones. Trump said that any agreed deal would be a 100% victory for the United States. Despite the fact that the US negotiating position is deteriorating every day (the US economy is signalling a slowdown, which is the result of the trade war, which means that the United States are interested in the deal), and the impeachment procedure does not contribute Trump to growth of his bravado and aggression in the negotiations. So the outcome of the negotiations does not seem predictable. As for the state of the world economy and the US economy, in particular, it is worth noting information about the upcoming personnel retrenchment in HSBC (up to 10,000 jobs), as well as the news that General Electric will freeze pensions for 20,000 workers. All these are extremely unpleasant signals. Recall, dollar sales remain our basic trading idea. At least this week. Our recommendation is to buy gold and the Japanese yen, despite their yesterday's decline, remain relevant. Today's entry points are close to ideal ones. Entering positions is necessary consciously, taking into account the fundamental background at that time, and also do not forget about the stops. These positions are good and prospective, but the fundamental background to relax. Any news on negotiations between the US and China will provoke a sale of gold - keep in mind. Another promising position, in our opinion, is the purchase of the British pound. A version of the agreement from Johnson was rejected by the EU and essentially sent for rework. On the one hand, the very fact of substantive negotiations suggests that the parties intend to conclude a deal. And on the other, Johnson is unpredictable. However, we believe in common sense, as well as the British Parliament, and advise to take advantage of the current uncertainty for purchases of the still cheap pound. Until October 31 (the deadline for Britain to exit the EU) there is not much time left.
FX:XAUUSDLong
by Trade24Fx
Last week outcome and current market statement ISM Manufacturing Index report announced on Tuesday was the main event last week. Recall, the Index fell to its lowest level since June 2009 - 47.8 points (below 50 means decrease inactivity). As a result, the dollar has undergone the most massive one-day sales over the last month. However, the sale did not receive further development. The markets were waiting for the statistics on the NFP (unemployment fell to 3.5%, which is a record low for the past few decades. NFP figures are close enough to the forecasts and market expectations. Nevertheless, the dynamics can be traced more clearly (downward trend). So after Friday’s data to come out, the Fed has untied its hands to reduce rates in October (currently the markets estimate the probability at 76%). We also note that lower wage growth is also another enable signal to lower the interest rate. So, our position as for the dollar has not changed, but rather strengthened. We will continue to look for points for its sales across the entire spectrum of the foreign exchange market. Moreover, the US has not only economic but also political problems. The beginning of the impeachment procedure, regardless of its outcomes, is a negative signal for the US dollar. As for the upcoming week, it will be relatively calm on Wednesday, the markets will look through the minutes of the last FOMC meeting, on Thursday data on the UK economy (GDP, industrial production), as well as inflation in the USA, on Friday, attention will be focused on statistics on the Canadian labour market, as well as consumer sentiment in the USA. Of our other preferences, we note the purchase of gold, as well as the Japanese yen. According to analysts at JPMorgan Chase, the 4th quarter in the last 10 years is the most unfortunate period for the Japanese yen. So do not forget about the stops and control the volume of entry. In the oil market last week, everything was following our forecasts. Goal 51.20 has been achieved. After that, the bears recorded profits on Friday. It is still difficult to say whether this fixation will turn into a full-fledged correction. So we will spend the beginning of the week neutral regarding oil - we will observe how events will develop and we will monitor the news background.
FX:XAUUSDLong
by Trade24Fx
The dollar is in jeopard: getting ready for the NFPIf you look at the dynamics of the Dollar Index yield at the beginning of the month, you might note that the maximum number of sales were on January, March, April, May, June, August, September and October. In general, it’s time to form a trading strategy: we are waiting for the beginning of the month and at around 3rd of October we are selling the dollar. With a probability of 80%, you can count on. The dollar has confidence in its power. This is what we have been expecting for a long time. In yesterday’s review, we noted the anomalous value of the dollar ( too high). And its decline finally happened. But for the further development of the downward movement, at least today, one more factor is needed. We are talking about statistics on the US labour market. If the NFP figures turn out to be worse than forecasts, the dollar will receive a powerful impetus for the development of the correction and will be sold out. We consider this scenario as basic. Data within the forecasts to come out +/- is rather against the dollar, than “for”. The figure +145 +/- is much lower than the average NFP number over the past couple of years, which fluctuates around 170-180K, which confirms that the US economy is slowing down. This will give markets a signal that the Fed will be forced to cut the rate at least 1 more time in 2019. And this is more than a serious reason for the sale of the dollar. In general, the dollar can be saved with the NFP figures in the region above the average, that is, above 180K, and preferably 200K. In this case, the US dollar may well stop its fall. Since the probability is small, today we will sell the dollar. Gold purchases, as we can see, are again relevant. So today, in the light of dollar weakness and deterioration in the general state of the US economy, we will continue to look for points for gold purchases. By the way, weak data on NFPs may well trigger sales in the oil market. The key point is concerned about the growth rate of non-oil demand, which in turn is directly related to the state of the world economy. Weak data will confirm fears that global growth will continue to slow, which in turn will make us think about a slowdown in oil demand. So this will be a bearish signal for the oil market. So today we are also inclined to look for points for the sale of oil since the current goal of the downward movement of oil was achieved yesterday. At the same time, we cannot fail to note that our recommendation on the oil market was given on Monday: to sell oil at current prices at that time of about 56.30 with targets at the bottom of 51 yesterday worked out well. So those of our readers who trust and listen to our opinion should meet Friday in a very good mood. + 10% excluding leverage in less than a week - this is very good.
Short
by Trade24Fx
Data from ADP, unstable gold and weak oilThe publication of US employment data from ADP came out yesterday. However, the outcome did not form positions in the markets. The + 135K figure came out almost in line with forecasts (experts expected + 140K), so the markets did not get an answer to the question of what to expect from the NFP figures. Although in general, the vector is unpleasant for the US economy and the US dollar in particular ( a decrease in the number of new jobs and a gradual deterioration in the US labour market). So our position on the dollar today is unchanged - we will continue to look for points for its sales. QAs for the dynamics of gold. Breakdown 1485-1490 gave the asset a sign to go down. The lows in the region of 1460 are in favour of that. But weak data on the US economy on Tuesday turned the situation upside down. Yesterday’s value of 1290 means the return to the bull market and the end of the correction. But since statistics on the US labour market will make the next batch of corrections already on Friday, we refrain from recommendations on gold this week: we will wait until the markets still decide whether to grow or fall. As for the oil. The market-determined the basic drivers: a slowdown in the global economy as a negative factor in demand and production restoration by Saudi Arabia as a positive factor for supply. As a result, sellers continued to dominate, and in the evening also intensified amid information about US oil reserves. According to the Ministry of Energy, weekly stocks rose by 3 million barrels, which is a bearish signal. So today we do not see any special reasons for the growth. But on Friday may well be adjustments. So on Thursday, we will continue to look for points for oil sales, but exclusively on the intraday basis. Although we note that oil prices have almost reached the calculated points for the current decline, announced by us on Monday. As for China and Germany, we do not expect anything special today. Tomorrow we are waiting for statistics on the US labour market, there is every reason to expect a relatively calm day, during which the markets will prepare for NFP data to realize. So today you can try to concentrate on active oscillatory intraday trading. For example, use clock oscillators and sell from the local overbought area and buy from the local oversold area. That is, to work without any obvious preferences.
FX:USOILShort
by Trade24Fx
Bank of Australia, euro immunity and dollar failureThe US dollar confidently dominated before the ISM index in the US industrial sector outcome, but after failure followed. The Australian dollar responded to the actions of the Central Bank. We observed decreased after the rate was reduced (the Reserve Bank of Australia yesterday lowered the rate by 0.25% to 0.75%. This decision was expected by participants in financial markets). In general, we received one more confirmation in favour of the formation of a global vector for the widespread easing of monetary policies by leading central banks of the world. The current value of the Australian dollar shows interesting for purchase. Given that the ratio of potential profit / expected loss in the AUDUSD is close to ideal, today we will try to buy a pair based on the fixation of profits or just working off the level of 0.67. Stops below 0.6660, but the profits can be set in the area of 0.6800. The Australian dollar was not the only one the US dollar was strengthening. Another currency is the British pound. But again, it can be understood, the political sphere of Britain is getting closer to a complete dead end. The data on the PMI index of business activity in the manufacturing industry, although came out much better than forecasts (48.3 points with a forecast of 47.0), still turned out to be significantly lower than 50. The euro received another painful hit. This time, the PMI in the manufacturing sector disappointed (with the forecast 45.7). However, there were no euro sales, which suggested the formation of a bottom from which it might be able to push off and develop a correction. In the USA, meanwhile, political conflict continues. The "X" moment came after the publication of data on the ISM index in the US industrial sector. The index fell to the lowest level since June 2009 - 47.8 points. Recall that an index exit below 50 means decrease inactivity. The markets took this as a signal that the Fed would raise interest rates again in 2019 and rushed to sell the dollar. We have been waiting for these sales for a couple of days (see our previous reviews). We consider yesterday's dollar decline only the beginning of its fall and today we will continue to look for points for its sales in the foreign exchange market. But at the same time, we note that yesterday's data was not something outstanding and sales were more related to expectations of possible weak data from the NFPs to come out than to the actual reaction to the ISM Index. Pay attention to the statistics on US employment from ADP. Although traditionally these data do not lead to a sharp increase in volatility, in general, the correlation with the NFP is small (about 20-25%), nevertheless, the state of the US labour market is one of the key moments, so a surprise may well provoke, for example, the long-awaited dollar sales by us. But for this, the figure should be below 100K.
Long
by Trade24Fx
Johnson's resignation, "Japanese disease" & oil The US dollar value is growing in the foreign exchange market. Although we do not agree with the current dollar state, however that what is happening. We are conscious of the futility of trying to go against the market will, but the sensation of the illogical nature of what is happening and the current dollar value still does not pass. So today we will continue to sell the dollar. Recall that partly the strength of the dollar is in the weakness of opponents. Yesterday, for example, weak data on the leading Eurozone economy came out. Germany now not only has negative economic growth, but also a decline in inflation. And this is already a completely bad signal. Something similar was observed in Japan in the 90s (“the lost decade”) and was called “Japanese disease”. So it seems like Germany has caught the same virus. This is also supported by the fact that leading economic institutions are going to lower forecast for 2019. In this light we sell EURUSD. This week, British Prime Minister Boris Johnson may well get his vote of no confidence, and Britain will finally plunge into the abyss of political chaos. Which, will quickly turn into economic chaos. At least yesterday's data on UK GDP (the indicator fell by 0.2% in the second quarter) shows that, as do polls by British companies that are rapidly losing faith in the country's economic prospects. In general, the pound also has reasons to decline. But on the other hand, do not forget about the rule that has been developed recently: "Johnson’s weakness is pound’s strength." buying in the area of 1.2290 and selling with 1.2350. In both cases, we set the small stops. There was an increase in sellers in the oil market yesterday. In this case, everything happened according to our forecasts and expectations. As a reason for oil sales, there were conciliatory statements from the country of the Crown Prince of Saudi Arabia in which he stated that "A bad peace is better than a good quarrel." That is, he confirmed the information that the Kingdom does not want the conflict to escalate. As a result, the third quarter was the worst for oil in 2019 (prices fell by almost 9%). Our recommendation for oil is unchanged so far - we sell oil. Sales target - bottoms $ 51 (brand WTI). Precisely because of the peace-loving crown prince, gold yesterday went below 1485. For us, this is a kind of watershed. While gold is below this mark, in our opinion, bears control the market situation. And this means that today we will sell gold with stops above 1285.
FX:XAUUSDShort
by Trade24Fx
Euro and pound weakness, dollar strength and US crisisThe political scandal in the United States and Trump's coming impeachment proceedings. So the US stock market was falling against this background, the dollar was striving for multi-year highs. Such behaviour could be explained by the weakness of competitors. The euro, for example, received a number of painful hits both from the weak data on the Eurozone (consumer confidence fell to the lowest levels since 2015) and Germany (according to experts at the DIW Institute, Germany's economy is heading into recession), and from the ECB’s chief economist announced the possibility of a further rate cut by the Central Bank. The British pound also suffered losses in the foreign exchange market. The main reason is Brexit, or rather, the lack of progress in the negotiation process between Britain and the EU, as well as a statement by Bank of England representative that the Central Bank could reduce its interest rate even if it would be possible to avoid Britain's exit from the EU without a deal. Despite the existence of reasons to dollar strengthen, we still consider it anomalous (in the end, the Fed has already lowered the rate twice this year and most likely will do it one more time). Therefore, this week we will continue to look for points for its sales. However, there is no need to look for for a long time - the current dollar prices are close to ideal sales points. Given the global vector of monetary easing by the Central Banks gold as an object of interest is strengthening. So this week we will continue to look for points of asset purchase. While gold is above 1485, we see no threats to its purchases. Last week, selles trend was dominating on the oil market. The main reason was information on Saudi Arabia return oil production to its previous level. Data on oil reserves in the United States (reserves rose), as well as updated IEA forecasts, showing a slowdown in the growth of demand for oil in the world. In this light, our recommendation to sell oil this week remains relevant. Remember oil might be corrected any time, that means that small stops must be placed with every open position in oil. With regard to macroeconomic statistics, attention should be paid primarily to statistics on the US labour market (traditionally it is published on Friday), the decision of the Reserve Bank of Australia on Tuesday (expected to reduce rates by 0.25%), UK GDP on Monday as well as consumer inflation in the Eurozone and US business activity indices.
INDEX:DXYShort
by Trade24Fx
A perennial problem of the dollar and profit-taking tradingThe US dollar continues to demonstrate the resistance. It does not decrease after the Fed cuts, it ignores macroeconomic statistics, it grows amid a political scandal and a possible impeachment of Trump. The US dollar as the main asset-refuge, the growth of the dollar is a consequence of the weakness of other currencies, etc.). But why? Obviously, with time the stock of negativity will accumulate. That is why we continue to recommend the dollar sale in the foreign exchange market. We are sure that all this is compensated by a large movement, which ultimately cannot be avoided. As for yesterday, we note that our expectations regarding the data on US GDP for the second quarter were fully fulfilled (they came out within the forecast of 2%). The bears failed to seize the initiative. We also note yesterday's US trade balance data, which showed a deficit of $ 72.8 billion. This is a lot. Yes, while the markets are trying not to see that, but once again we note that sooner or later the US debt will be remembered both by the giant US debt (soon it will be $ 23 trillion), and the constant budget deficit (already exceeded a trillion) and the trade deficit (year on year) striving for a trillion) and so on. In the meantime, the main attention of the markets is focused on what is happening in the repo market. The Fed continues to flood the market with money. Injection volumes have already reached $ 100 billion per day (before that it was about $ 75 billion). Against this background, the growth of the dollar seems even more abnormal. Friday in terms of macroeconomic statistics will be relatively calm. Considering that several assets showed good growth over the week, Friday could well be a day of profit-taking, because it will be the end of the month. In this light, our recommendations for today are as follows: buy gold, sell the dollar, buy the pound and the euro, also, today you can try to buy oil. Do not forget to put hard stops in open positions.
Long
by Trade24Fx
Impeachment inquiry against Donald Trump, Sino & Johnson resignStatement by US President Donald Trump that the agreement with China could be concluded “earlier than you think.” let to the volatility on the financial markets as well as gold. Considering that in the last six months there has been more than enough speculation on the topic of negotiations between the US and China, we have not rushed to draw conclusions and work not with rumours, but with facts. The facts are no specifics will appear before October. So lower gold value yesterday is a great opportunity to buy it today. But, of course, we do not forget to set up relatively “hard” stops for purchases and watch the news. British Pounds lost a half and a hundred points to the US Dollar. The reason was the growth of uncertainty around Brexit, a potential domestic political crisis and the general confusion of the country's politics. The fact is that after the Parliament, according to the decision of the Supreme Court, returned to work (3 weeks ahead of schedule), Johnson's chances of resolving the situation with Brexit until October 31 sharply decreased. And the British opposition, meanwhile, is waiting for the moment to strike ( a vote of no confidence in Johnson and his resignation). The most successful moment for the attack will be on October 17 at the end of the EU summit. If it becomes clear that there is no agreement between the EU and Great Britain, Johnson will receive his vote on a vote of confidence. So, why the pound is falling is clear - Britain is sinking deeper into the chaos of uncertainty. For our part, we will continue to buy the pound, as current events practically negate the option of “hard” Brexit. Another scenario is the next postponement of Brexit, a new referendum, new elections, etc. - Which is a positive sign the pound (in the context of Brexit). If the pound reacted with dropping against the backdrop of political news yesterday, the dollar was growing. The scandal surrounding Trump's telephone conversation with Zelensky is intensifying. Speaker Nancy Pelosi said the House would begin formal impeachment proceedings against President Trump. Against such a background, recommending buying a dollar would be strange. So we will continue to look for points for the dollar sale. Another important news for the dollar will be the publication of statistics on US GDP for the second quarter. But we draw the attention of our readers that this is the final reading. Accordingly, the probability of any surprises is small. That is, support for the dollar should not be expected. But a revision even insignificant in the direction of reduction may be the last drop that will overfill the markets patience. In the oil market, everything is developing accordance with our forecasts a decline in oil. Saudi Arabia will return to its usual volumes production ahead of schedule. At the moment, production has already reached 11.3 million bpd (a week ahead of schedule). So the incident with a drone attack and a sharp drop in oil supply is over. The price of oil, as we predicted a week ago, returned to levels before the drone attack. As for the future, the accumulated inertia may well be enough to reduce oil. So our position has reached its planned goal, as a whole remains unchanged - we give preference to oil sales. But now you need to do this more carefully. Especially in light of the news that Saudi Aramco plans to go public IPO next month. That is, attempts at price manipulations in the oil market shortly are more than likely.
FX:XAUUSDLong
by Trade24Fx
Britain & US "race to the top” eventfull countryThe Supreme Court has ruled that Boris Johnson suspended UK Parliament unlawfully. Also, Johnson gave the Queen illegal advice to suspend Parliament. On the one hand, the news is not good for the pound, because it means another domestic political crisis, on the other hand, such a court decision should lead to Johnson's resignation. The pound has recently followed the rule "what is bad for Johnson, good for the pound." So from this point of view, yesterday's pound growth just looks very logical. The weakening of Johnson’s position means a chances decrease of a “hard” Brexit. For the pound, of course, the news is exceptionally positive. So we will continue to observe with interest the chaos in Britain, but at the same time, our recommendation to “buy a pound” does not lose its relevance. However, you need to be careful. It is worth noting buyers activation of the euro against the statistics background from Germany. Indices of economic expectations from the IFO came out better than expected at fairly good marks. However, it is still too early to rejoice. Rather, this growth provides an opportunity for euro sales at relatively good prices. Yesterday the US dollar was under pressure in the afternoon. Weak consumer confidence data is the reason for that. Conference Board consumer confidence index showed a value of 125.1 with a forecast of 133.0 in September. Our recommendation on the dollar is unchanged - we are looking for points for the dollar sale. Moreover, the scandal surrounding Trump Zelensky’s call seems to be gaining momentum. The chances are low, but buying a dollar against such a background is still extremely dangerous, especially considering its current prices. Yesterday, the markets were reassured by the news that China guaranteed the American soybeans purchase at no additional cost. What can be seen as a kind of positive signal on the eve of the main meeting between the US and China next week. However, judging by the dynamics of gold, investors prefer to believe the facts. Accordingly, we do not observe serious threats to our recommendations to buy gold in the area of local daily lows. Moreover, Trump once again made it tenser. Speaking at the UN General Assembly, he accused China of a good half of mortal sins. There are no major changes in the oil market so far. Fears of another hurricane in the United States, expectations of recovery in Saudi production, as well as developments around Iran. Well, in the meantime, oil prices follow in the direction we have indicated. Recall from last Tuesday, after an increase of 15% last Monday, we recommend selling oil.
Long
by Trade24Fx
The weakness of Eurozone, the mercy of Iran and demarche of SinoSome cases are still unresolved also news that the Chinese delegation has cancelled a planned visit to American farms only exacerbates. So yesterday's gold growth was more than logical against the backdrop of fears of the failure of negotiations on trade wars. Our position on gold is unchanged - we continue to look for points for asset purchases. This is happening against the background of a decrease in oil quotes. Moreover, there was an additional reason for bears. The decision of the Iranian authorities to release the British tanker Stena Impero. Formally, this is a signal of the tension decrease in the region. However, you should not rely on peace in the Middle East. The situation continues to be unstable, especially after the United States decided to send the military to help Saudi Arabia. However, our recommendation to sell oil remains relevant. In our opinion, the factors in favour of asset sales outweigh the arguments in favour of purchases. Among the main arguments the restoration of oil production by Saudi Arabia, fears of a decrease in demand on the oil market amid a deterioration in the global economy and the offshore revolution in the United States. Euro update. PMI indices in the whole Eurozone, as well as its key economies - Germany and France - came out distressing. Production indices everywhere dropped below 50, falling below the most pessimistic forecasts. For example, the PMI in the manufacturing sector in Germany in September reached 41.4 with a forecast 44.0 (by the way, the rate of decline in Germany's economic indicators is the highest over the past 10 years). That is, economic activity is deteriorating rapidly. Although the PMI in the Eurozone as a whole is still above 50, judging by the current dynamics, it will soon go below this mark. Yes, and the current value of 50.4 is the lowest mark for the last 4 years. Recall that we recommend selling the euro primarily against the Japanese yen, as well as the British pound. Even against the dollar, for all our disbelief in it, we are more likely to sell euros than buy. Moreover, the data on PMI indices in the USA yesterday came out not only above 50, but also better than forecasts. Once again, we point on excellent opportunities for Russian ruble sales.
Long
by Trade24Fx
Repo-injections in the USA, Brexit optimism and other resultsWe have already written about the results and the Fed’s decisions, the Bank of Japan, Switzerland and England in a previous review. We only note that mood is “dovish”, which creates a favourable background for the gold growth, therefore, we continue to buy the asset this week. As for the USA repo market. A shortage of liquidity in the money market provoked the Federal Reserve Bank of New York for the first time in 10 years to resort to liquidity injections. We are talking about tens of billions of dollars a day. So far the dollar on the foreign exchange market reacted calmly, the problem may well be aggravated. Too large volumes of US government bonds are pumping dollars out of the US money market, which stimulating dollar infusion by the Fed. Whether it turns on the money machine at full capacity or a new round of quantitative easing is not clear yet, but for the dollar, it is an alarming signal. Our position on the dollar is also unchanged so far - we are looking for points for its sales. First of all, against the Japanese yen and the British pound. The last 3 weeks have been extremely successful for the British pound. Its growth against the dollar, counting from the beginning of September, reached 600 points. The last time such an impressive rally was observed at the end of 2018. Brexit is the reason for all the troubles and joys. This time, a series of defeats of Boris Johnson in Parliament led to the fact that the markets believed that there would be no withdrawal without a deal. This in turn sharply increased the chances of successful negotiations with the EU. This is also supported by European Commission President Jean-Claude Juncker comments that the Brexit deal could be concluded before October 31. But not everything is decided, this week is likely to give the pound several reasons for volatility. We are talking about unresolved problems with the Irish border, as well as the decision of the Supreme Court of Great Britain regarding the legality of the suspension of Parliament. Our position on the pound is still unchanged - we will look for points for purchases of the British currency. But we will do this from relatively conservative points. Friday showed that the pound can not only grow but also fall. Last week was extremely busy for the oil market. The drone attack on the oil infrastructure of Saudi Arabia not only led to a 50% drop in oil production but also triggered a panic in the oil market. The result is the one-day oil growth record in history (an increase of about 15%). However, the very next day, Saudi officials assured that by the end of September production volumes would be restored. Even though now some imbalance has arisen in the oil market, given its temporary nature, we recommend oil sales. Comments from Arabia on the restoration of production ahead of schedule is likely to return oil to the level at the start of last week. And this means that 5% is the potential oil decline.
by Trade24Fx
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