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The world is on the brink of a recession & the US back-pedaledFinancial markets faced a sharp surge in concern. The Fear Index (VIX) soared (+30%). The Argentine Peso lost the same amount of its value yesterday. It is all about the populists in Argentina. Well, it is quite interesting how many times you need to fail again and again to understand one thing - that is a bad idea. Tsipras and Greece again on the brink of default. Chavez and Venezuela. Johnson and the UK leave the EU. Trump and the USA wage war against the whole world. Government of change in Italy and yellow vests in France, etc. - The list could be made even longer. But there is only one common denominator - the populists and the consequences that the country's economy pays for. Therefore, the financial markets reaction to the news from Argentina is understandable. We know how this is going to end., preferring to discount in advance. Not surprisingly, gold prices soared. Despite such a rapid asset value growth, we were waiting for a correction in gold this week, just needed a reason To. Trump delays China duties. The duties delayed until Dec. 15. This is without a doubt a serious conciliatory step on the part of the United States. So, sales of gold today, in our opinion, are more than appropriate. Returning to the world economy issue, triggered by a trade war. Singapore's GDP growth for 2019 to come in at 2% to 0.5%. The economy of Singapore, with its specifics, is almost ideally fit to be an early indicator of the world economy state. So the signal we have is alarming. Take for example yesterday’s data from the EU. The ZEW Institute's expectations index in August fell to minus 43.6 points. This is almost two times worse than the July value (minus 20.3) the lowest mark since 2011. We continue to expect a decline in the dollar value. Logically, dollar devaluation is the only thing that could save the US economy from recessionary processes and keep Trump. So we recommend looking for points to sell the dollar. First of all, we recommend selling it against the British pound, which yesterday unexpectedly received support from the UK labor market data: employment in June grew by + 115K (expected plus 60 K). About the macroeconomic data, the block of inflation statistics from the UK will be published today. As well as GDP in the Eurozone.
FX:XAUUSDShort
by Trade24Fx
1
The best deal of the second half of the yearToday we are writing about the best deal of the second half of 2019. While many believed that this is the pound purchases (this is potentially the best deal in the foreign exchange market, but not in the financial markets as a whole), but no, the best deal is natural gas purchases. Its current price looks extremely attractive for several reasons. let's start off with the fact that over the last 9 months, natural gas prices of international markets have fallen from $ 5 to $ 2 per MMBTU, that is, almost 2.5 times (!). There were a lot of reasons for, but the main ones were the sharp increase in gas production in the USA due to the shale revolution and the intensified struggle in the gas market for a share, where price became the main weapon. The unexpectedly warm winter, especially in the USA, as well as the trade war escalation, led to increased fears about the demand growth for natural gas. What is happening is very similar to what we observed in the oil market in 2014, when Saudi Arabia announced that it would increase production to increase its share in the oil market. As a result, oil prices for half a year fell by about 2.5 times. But after that, oil prices rose by 2.5 times. how the situation on the oil market was straightened out. - the collusion of a number of oil producers within the OPEC + framework and the artificial reduction of supply on the oil market. Could this happen on the gas market? The answer is unequivocal: yes. Moreover, it is much easier to do on the gas market, rather than on the oil market. If OPEC controls less than 40% of the market and therefore additional participants were needed such as Russia and a number of other countries, then the GECF gas cartel controls more than 50% of the market. And the top 5 countries in gas production hold a market share of over 65%. All you need is 5 countries to change the balance of power in the market. Recall, in order to organize an OPEC + agreement in the oil market, 25 (!) Countries were needed. However, such a deal in the gas market may not be needed. US production growth is rapidly falling (from 50% to 10%). And according to the Energy Information Administration (EIA) forecasts, in the first quarter of 2020 gas production will begin to decline. Natural gas today is the main source of energy generation: According to British Petroleum estimates, global energy demand will increase by a third by 2040. As a result, the growth in demand for natural gas will be about 50%. That is, you really should not worry about. A potential positive force majeure for the gas market could be the dollar devaluation. Whether it happens as a result of US currency interventions or would be associated with an easing monetary policy by the Fed, we do believe that there is a chance of a decline in the U.S. dollar value. And since gas prices are denominated in dollars, its fall will automatically mean an increase in gas prices. The minimum goals in case of correction development are growth by $ 2.7, which is equivalent to 35% excluding leverage (with a leverage of 1 to 10, which is about 350 (!)%). As for the medium-term goals, it is appropriate to expect the achievement of the $ 3.3 mark. Profitability, in this case, will be unrealistic 65%. Unrealistic because taking into account the leverage 1 to 10, this is equivalent to 650% of the profitability of the deal.
FX:NGASLong
by Trade24Fx
Markets recovering, and we sell almost everythingThis summer can not be called calm. Nonetheless, increased volatility and uncertainty are advantages. There are excellent trading opportunities every day, of course, if you understand what happens in the financial markets. Recall China lowered the value of the Yuan below its 7 to 1 peg against the dollar in response to a new series of U.S. tariffs. China Halts U.S. Agriculture Purchases. China has chosen the most painful points for Trump. The result was a sharp increase in demand for safe-haven assets, so those of our readers who heed our recommendations should have made good money buying gold and the Japanese yen. However, the value of gold and the Japanese yen, in our opinion, is too high. Yes, and the VIX Fear index dynamics. (decreased by more than 20% of the maximum marks achieved after Trump's decision to raise tariffs) suggests that the worst is over so far. So this week we will sell both gold and the Japanese yen. Since such a decision runs counter to the current the market will, we fix each position with hard stops. Friday appeared extremely “bad day” for the pound. Last week, the pound was consolidating in the region of 1.21-1.22 ( GBPUSD), gradually “compressing the spring”. As a result, UK GDP growth for the second quarter decreased (expected zero growth), as industrial production in June. The UK GDP growth rate has not crossed the negative zone since 2012. So when the GBPUSD is lower than 1.21 is a trend. Our trading position on the pound has not changed much - we continue to keep its medium-term purchases, but on the intraday basis go against the market and take extra minutes is not worth it. So for now, GBPUSD is below 1.21 so its short-term purchases you should probably wait with. A return above 1.21 will be a signal for its purchases. As for the upcoming week, on Tuesday, we pay attention to statistics on the UK labor market and consumer inflation in the United States, on Wednesday to the Eurozone GDP and inflation in the UK, on Thursday we monitor data on retail sales in the US and the UK, and on Friday we fix profit. So it won’t be boring. We continue to work and earn. Our trading activity for today will be exclusively bearish: we sell gold and the Japanese yen; We sell the Russian ruble and oil.
FOREXCOM:XAUUSDShort
by Trade24Fx
Getting ready for a pound move and earning with USDCADThis week is not that much eventful for the financial market however there is an exception - Friday. A block of statistics from the UK, including data on GDP and industrial production. The general slowdown in the global economy, not positive expectations of experts may well come true. The current forecast for UK GDP growth in the second quarter is 0%. That is, too close to the negative zone. The decline in GDP will be a significant and negative signal for the pound. So, we are not sure about its purchase today. Especially when you consider the extremely aggressive rhetoric from the current British authorities regarding Brexit. The thesis "Brexit at any cost" continues to dominate. In general, today for the pound may well be the day of the start of a big move. The fact is that the consolidation at the bottom is clearly delayed. For more than a week, GBPUSD has been fluctuating in a range of 100 pips. This is extremely atypical for a quite volatile couple and, as a rule, is a sign of big movement. The spring is compressed to its limit, and today's data could straighten it, causing a sharp increase in the pound. Today we see the following plan for working with GBPUSD. Weak data and sinking below 1.21 mark is a signal to sell the GBPUSD with minimum targets at a low of 1.20. But if the data turns out to be better than forecasts, the “spring” may straighten in the opposite direction. In this case, a full correction in GBPUSD is inevitable. Therefore, we consider the good data, along with the rising above 1.22, as a strong signal to buy with targets 1.2420. As for other statistics, a large block of data on the Canadian labor market will be published. Our recommendation is to trade on the news. 2-3 minutes before its release, we place pending orders “buy stop” and “sell stop” at 15-20 points from the current price. We are waiting for the data and earn. It is worth noting a certain yuan stabilization - China is trying to show that it was just a demonstration of power and not a currency war. Rising tensions and concerns in global financial markets, demand has grown not only for gold and the Japanese yen but also for US Treasury bonds, traditionally the main object of interest from institutional investors and central banks from around the world. As a result of the growing demand for US treasury bonds, demand for the dollar naturally grows (inverters need dollars to buy bonds). So it seems Trump has outplayed himself. And instead of provoking the dollar devaluation, and increased demand for it and exacerbated the already unpleasant situation for the United States. Nevertheless, we do not plan to change our position yet and recommend selling the dollar on the mid-term and intraday basis. As for our other recommendations, we are still interested in selling the Russian ruble and oil, as well as buying the Japanese yen.
by Trade24Fx
“Kiwi” shows the dollar how to respond to rate cutsYesterday, several influencing decisions on easing monetary policy from the “echelon” were coming out of the Central Banks. In particular, New Zealand’s central bank cut interest rates a steep 50 basis points. The Reserve Bank of India also cut the rate by 0.35%, as well as the Bank of Thailand by 0.25%. As a result, The New Zealand Dollar has been depreciating in a descending channel pattern against the US Dollar (3%). That is, the New Zealand dollar shows American how to respond to monetary easing. In this light, it would be useful to recall that the US dollar, by and large, ignored the Fed rate cut last week. That is, it continues to develop the potential for a downward movement. So, its sales continue to be relevant and perspective in terms of earnings. Moreover, after the devaluation of the renminbi, Trump’s desire to devalue the dollar increased even more. According to Viraj Patel an ING strategist, the United States might conduct direct foreign exchange intervention by selling dollars from the Exchange Rate Stabilization Fund (ESF). And this is not the only option. The Fed may make currency interventions or may be the Ministry of Finance or both bodies at the same time, as it usually happened before. As for gold, the current mood is clearly on the buyers' side, as well as the general fundamental background (the next round of monetary easing by leading central banks). Also, the Central Bank of China is actively increasing physical gold purchases, creating additional demand for the asset in the market. Nevertheless, in our opinion, gold is too overbought and for now, we will refrain from buying it in the movement direction. Now, if we make purchases, then from extreme daily lows, but in general we begin to prepare for a correction and early gold sales. Today is not rich in important macroeconomic statistics, so there is every chance of continuing the development of current trends. As for our recommendations, we will continue to sell the dollar on almost the entire spectrum of the foreign exchange market. Pound purchases are still interesting to us in the long term, as are sales of the Russian ruble and oil.
Long
by Trade24Fx
Currency manipulator & Goldman Sachs forecastsAfter China devalued the Yuan on Monday, markets were awaiting a US response. It appeared quickly enough: The U.S. Treasury Department announced late on Monday that it had determined for the first time since 1994 that China was manipulating its currency, knocking the U.S. dollar. Maybe in response to this, or maybe just to show that the fall of the renminbi on Monday is just a power struggle, the People’s Bank of China took steps to stabilize weakness in the yuan. As a result, its fall has stopped and even strengthened somewhat. Although the Yuan against the dollar remained above 7. Investors yesterday were able to take a breath. Haven assets after strong growth on Monday, adjusted on Tuesday. Given that the situation remains tense and uncertain, we continue to recommend the Japanese yen and gold purchases. We also continue to recommend selling the dollar. Against the background of such a development of events, it is more than logical and to expect a further rate cut. Currently, according to the Chicago Mercantile Exchange, 100% of traders expect the Fed rate cut in September. But there is another interesting point. If last week only 1.5% of traders expected a 0.5% decrease, then this week the percentage was already 21.5%, that is, the probability increased sharply - almost 15 times up(!). Thus, we are talking about the reduction of the rates two times in a row. And the dollar is still extremely expensive. So the opportunity for its sales is unique. It’s even strange why the markets cling to their purchases. Goldman Sachs Group Inc. recently published their vision of the current situation in the world. Their forecasts are: the Fed will lower the rate in 2019 at least 3 times, a trade war will continue until 2020, and still Trump is the President we should not count on its end. In general, the vector of development of events has not yet changed. Therefore, our basic trading recommendations are also unchanged. In addition to selling the dollar and buying safe-haven assets, we continue to sell oil and the Russian ruble. We also hold long positions on the pound and those who do not have them have the opportunity to buy at very attractive prices.
by Trade24Fx
US-China trade war is starting to get out of handChina loses patience. After Trump attacked China, markets have been waiting for China to the response. Sino inflicted several very strong and unpleasant hits for the United States and Trump personally. One . China lowered the value of the Yuan below its 7 to 1 peg against the dollar in response to a new series of U.S. tariffs. Thus, China partially solves the problems of its exporters arising from US sanctions. Recall, exporters are going to benefit from the devaluation of the national currency. As a result, with constant sales volumes in dollars, exporters receive more. Which, in fact, artificially inflates the financial results of exporters. Note that Trump for more than a month has been talking about the need to devalue the dollar to support American companies, but so far he cannot find support either from the Ministry of Finance or from the Fed. At that time, China one day solved this problem for itself. Two . China Halts U.S. Agriculture Purchases. One of Trump's main complaints against China was the decline in US agricultural imports. What caused direct harm to US farmers and the US economy as a whole. So, the Chinese government has asked state-owned enterprises to suspend US agricultural imports. This is a severe hit to the pride of Trump and the US economy. Three . Bank of America Merrill Lynch warns that China may cross out US administration’s success in restricting Iranian oil exports. US the sanctions and about 2 million barrels per day of crude has been forced out of the oil market, and BofAML believes that China if desired, can return a significant part of them - about 1.5 million b / s. What does this mean for the USA? A powerful diplomatic slap in the face, as well as potential problems for the whole US oil sector. The simultaneous release of 1.5 million b / d of oil to the market will lead to a sharp drop in oil prices. Analysts voiced estimates of decline up to $ 40 per barrel. And this will put the US oil industry on the brink of survival, or even beyond. Total - everything is bad. Trump may well go to the next level of the conflict escalation. Too painful hits inflicted by China. And this means that commodity assets, including oil, should be sold. A save haven should be bought. We sell the dollar because one of Trump's possible reactions is the dollar devaluation. Currencies from developing countries are also worth selling. The Russian ruble which is under triple (or quadruple) pressure: falling oil, trade war, Russia's Central Bank cut its key interest rate, new sanctions by the United States, dispersal of rallies in Moscow, and this is not counting the main reason for the sale of the ruble - a weak economy of the Russian Federation.
FOREXCOM:XAUUSDLong
by Trade24Fx
2
Trump and Powell confrontation and current marketsLast week proved quite eventful for financial markets. More than we expected. The Federal Reserve cut its fed funds rate on Wednesday by 25 basis point to a range of 2% to 2.25%. Fed Chairman Jerome Powell said, “It's not the beginning of a long series of rate cuts,”. The current rate cut is a reaction of the Central Bank to an economic slowdown, and its further actions will depend on the state of the economy. The Fed also noted the trade war negative impact on the US economy. Trump shocked the markets in May by hiking tariffs to 25% from 10% on $200 billion in Chinese goods. China immediately retaliated and said a trade deal will not be reached unless the existing duties were stripped. In this light, the safe-haven assets are needed to be bought. As a result, Interactive chart of historical data showing the broad price-adjusted U.S. dollar index published by the Federal Reserve has shown its MAX since 2017. The Banks of Japan and England maintaining the existing structure of the financial system have decided not to change the existing status. A new round of the trade battle between the United States and China. “The U.S. will start, on September 1st, putting a small additional Tariff of 10% on the remaining 300 Billion Dollars of goods and products coming from China into our Country,” says Trump in a tweet. China quite naturally replied that it would respond adequately. Nothing foreshadowed trouble. On Monday, American delegates arrived in Shanghai. Although that did not bring any special results, the parties agreed to meet in September already in the United States. That is, it would seem, there is a certain process. And here Trump comes out with his statements. We have a small conspiracy theory about this. Pay attention! The time when Trump announced a new round of trade war is similar to the Fed’s decision the reaction and Powell’s comments as well, which led to a rise in the dollar price. Recall, Trump is extremely dissatisfied with the strong dollar, but, despite all his criticism of the Fed and Powell, the US Central Bank continues to bend its line, ignoring the requirements of the President. What Trump has to do if it is not possible to push through the idea of currency intervention, for now? He has only one tool of indirect influence - trade war. Its escalation will force the Fed to lower the rate further, which in turn will drive to a decline in the dollar value as a reaction to the cycle of depressions. Another important event last week was the publication of statistics on the US labor market. The NFP came out worse than forecasts, but on the whole, the value is sufficiently neutral (although we note that the June’s job report has revised down by more than 30K). Our position on the dollar remains unchanged - we recommend selling it. Escalating trade war increased the likelihood of several Fed rate cuts in 2019. Data on the NFP signal a slowdown in the US economy and Trump makes it unequivocally clear that he intends to “fight” a strong dollar. So the current week we declare a week of dollar sales. Besides, it makes sense to buy safe-haven assets. Remember, sell the Russian ruble and oil.
Long
by Trade24Fx
NPF data may confuse marketsYesterday, markets somehow tried to price the rate cut in and realized that the door that has been opened for a cycle of rate cuts by FED is not the beginning of a downward cycle. Therefore, the dollar continued to dominate the foreign exchange market, but the stock market was experiencing problems. We would like to draw attention to an important nuance in the Fed's rhetoric - the further of the Central Bank actions will be determined by the state of the economy. One of the key indicators of its health is the state of the labor market. That is why today's US statistics is important. Weaker data on the NFP will give the markets a new serious reason to expect further rate cuts by the Fed. This will finally confuse the foreign exchange market. Strong numbers will show that the Fed should not be in a hurry and cut the rates. That will give a signal that the markets were right when did not sell the dollar-based on the rates cut fact. What do we expect from the NFP data? If we look at the ADP figures, then the + 160K is the most likely scenario. But we cannot but note that the forecast is less than the average value of the NFP indicator over the last couple of years suggests that the US economy is slowing down. In general, the output of data in of 150-180K area is a kind of a “grey” zone, when it is difficult to be sure whether this is good or bad. In this case, you can expect anything - both the start of the dollar correction, and the continuation of the current upward movement figures below 140-150K in our opinion can be the reason to close existing long positions in the dollar in order to fix the profits. This, in turn, can lead to the start of a correction in the dollar. NFP above 200K is a serious positive signal for the dollar, which practically removes the question of lowering the rate in September from the agenda. We note a lack of progress in U.S.-China talks in Shanghai this week. Apparently in response to this lack of progress and in punishing the Chinese for their obstinacy, “The U.S. will start, on September 1st, putting a small additional Tariff of 10% on the remaining 300 Billion Dollars of goods and products coming from China into our Country,” says Trump in a tweet. The trade battle between the world’s two largest economies has dragged on for more than a year and a half. Trump shocked the markets in May by hiking tariffs to 25% from 10% on $200 billion in Chinese goods. China immediately retaliated and said a trade deal will not be reached unless the existing duties were stripped. In this light, the safe-haven assets are needed to be bought. Bank of England yesterday did not change its monetary policy. What was expected and had little impact on the dynamics of the British currency. It still remains captive in Brexit. We plan to meet the end of the week with dollar sales, which, however, ready to close in case of the NFP excellent figures. Sales of oil and the Russian ruble do not lose their relevance, as well as the purchase of safe-haven assets.
Long
by Trade24Fx
FOMC decision and dollar reaction, BoE and other newsThe main event of yesterday was undoubtedly the announcement of the outcome of the meeting of the Federal Open Market Operations Committee. The 0.25% cut has "symbolic importance" as one analyst puts it. data from the Fed funds futures market has suggested that for weeks 100% of investors already expected at least that much. We still do believe that we have to sell the dollar. The reason is the same. We prefer to make decisions based on facts, rather than rumours and expectations. After the Federal Reserve's announcement that it would lower its basic interest rate that is a bearish signal for the dollar. Plus, the Fed announces a plan to end balance sheet runoff well ahead of schedule. Another fact and another signal in favor of dollar sales. As well as market sentiment has not changed fundamentally even despite the rapid growth of the dollar. More than 80% of traders expect at least the second reduction in the Fed rate in 2019. Data on GDP and consumer inflation in the Eurozone, which came out in line with our expectations. Note that Eurozone GDP Growth Confirmed at 0.2% So the Eurozone economy continues its unconvincing series of economic data. In this light, we find a very prospective position on the foreign exchange market - sales of EURGBP. Also yesterday, data on employment in the US from ADP were published. Private payrolls rose 156,000 in July, better than economist estimates of 150,000. On Friday the NFP outlook will be published, so Friday will be an interesting day. Bank of England meeting results that is what we are waiting for today. Markets do not expect any surprises, which is generally logical. Despite the fact that today the Bank of England will give support the pound, we continue to recommend its purchasing. The motivation is the same - the markets incorrectly assess Brexit situation and its outcome. Also, pay attention to the data on business activity in the United States. We sell Russian ruble and oil and buy the Japanese yen.
by Trade24Fx
Dollar Anomaly and the Fed DayBritish pound reached a three-year low yesterday. The pound was sold out on growing fears of a potential ‘no deal’ Brexit. Investors perceive Johnson's words at face value. We do believe that nothing more than a snare which is based on an attempt to gain an advantage in the negotiation process. So, the markets are wrong, and the pound current price does not correspond to its REAL PRICE - it is very undervalued. Therefore, we continue to recommend its purchases across the entire spectrum of the foreign exchange market. Especially against the dollar. As for the dollar, the situation has not changed much - it continues to show its strength although today the Fed might deal a severe blow to it. We have already noted that the markets estimate the likelihood of curring the interest rate at 100%. The current probability that the interest rate will be reduced 3 times by January 2020 is about 70% (!). And this is a serious signal for dollar sales, that is going to be a cycle of rate cuts, that is, a reverse in the Fed’s monetary policy. The vector change cost 15% loss of the dollar price. Once again, we note that the foreign exchange market cutting the interest rate probably did not take into account. For example, the stock market has responded with new historical highs — a “classic” reaction for such situations. The bond market also took into account this. And the dollar in the foreign exchange market behaves abnormally. Anomalies do not often occur in the financial markets and this fact must be used. So today we sell a dollar. In addition to buying the pound and selling the dollar, we will continue to sell the Russian ruble and oil, buy the Japanese yen.
TVC:DXYShort
by Trade24Fx
1
Illusions: do not cheat but earnThe pound hasn't been consistently lower since 1985. Mr Gove told reporters earlier: a “no-deal Brexit is possible”. Boris Johnson is refusing to sit down for talks with EU leaders until they agree to ditch the Irish backstop from the Brexit withdrawal agreement. Entry-Exit will cast approximately $ 1.2 billion. Well, Europe is satisfied with the current deal version. Despite that fact that the British pound was sold out on growing fears of a potential ‘no deal’ Brexit, we believe that the parties negotiate better bargain for themselves by voicing extreme positions. That is a big game. And understanding of its rules throws the entire perception of reality into the adequate one, including the British pound future dynamics. In our opinion, what is happening with the pound is a one form of deception, an illusion, a false reality is formed on the market. One of the manifestations of this is the pound current prices and its price dynamics. We believe that it is a significant opportunity for purchasing. The question is if you have got enough patience to wait for profit. Meantime, we are on track in the punchline of this summer, or of 2019, in the foreign exchange market. The Federal Reserve's Review of Its Monetary Policy Strategy. We already wrote that the current consensus in the market is a cut rate (according to the Chicago Mercantile Exchange 100% of traders believe in). However, the dollar is in the area of two-year highs. Seems lake on Wednesday they are planning to increase the rates. Do not forget about the GDP (2.1% in the second quarter, 3.1% in the first), impeachment against US President Donald Trump, possible foreign exchange interventions by the US side, etc. Why is the dollar so expensive? Isn't it time to be discounted under the Fed decision? In the end, cutting rates of the central banks is the strongest bearish signal for the currency. As an example, the Fed cut rates in 2007-08, during that the dollar lost about 15% (!) Of its value. In our opinion, we are dealing with a classic “divorce”. Markets test traders’ "strength." So, those who pass this test earn. So our recommendation is: sell the dollar or keep the existing short positions. So, despite the dollar growth yesterday, our trading recommendations are unchanged: we will continue to sell the dollar, as well as selling oil and the Russian ruble.
Long
by Trade24Fx
The Fed, the Banks of Japan and EnglandAt the last meeting, the Governing Council of the European Central Bank (ECB) decided that the interest rate remain unchanged. Also, Mario Draghi said that officials had not discussed the rate cut. Accordingly, the euro has a good chance this week to rebound from the medium-term range lowest level. In this regard, our position on the euro - we buy primarily against the dollar. Boris Johnson Became U.K. Prime Minister, Replacing Theresa May. Markets are frankly afraid of Johnson because of his aggressive position on Brexit. As a result, the pound is under strong downward pressure. But again, it is so far underwater right now given that there are no real reasons for this - market expectations are based on fears and rumours, not facts. We believe that common sense will eventually win and bet on the pound growth. Therefore, we recommend its purchase. The data on the US GDP for the second quarter will be published today. GDP probably expanded 1.8% in the second quarter, down from 3.1%. If the growth is 2.2-2.5%, then the dollar, perhaps, is not in danger until Wednesday. But if 1.8%, it cannot avoid sales. This will be the main event not only of the week but of the summer. Wednesday may well lay the foundation for a dollar downtrend in upcoming months or even years. We are still waiting for the Central Banks of Japan and England meetings, as well as the Eurozone GDP outcome and the US labor market data to come out. In general, it will not be boring. Our trading recommendations for the week are as follows. We will continue to look for opportunities for selling the dollar across the entire spectrum of the foreign exchange market, buying the pound against the dollar as well as against the euro, selling oil and the Russian ruble, and also buying the Japanese yen against the dollar. As for gold, in the oversold we buy and in the overbought area we sell gold.
Long
by Trade24Fx
Prepare for US GDP, ECB results and Fear IndexAt yesterdays' 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 at 0.00%, 0.25% and -0.40% respectively. Nevertheless, the comments from the Central Bank turned out to be very dovish, opening the way to further monetary easing in September. For the euro, of course, this is not a positive sign. However, we do not throw the euro under a bus yet, because next week’s meeting of the Federal Reserve will likely mark the beginning of a prolonged period of lower interest rates, in our opinion, this event is more important than words about future easing (in the battle of facts with expectations, we will give preference to facts). Also, the euro is supported by the head of the European Central Bank, Mario Draghi, who said that officials had not discussed the rate cut. Our position is unchanged - we buy EURUSD with current price with stops lower than 1.11. The data on the US GDP for the second quarter will be published today. GDP probably expanded 1.8% in the second quarter, down from 3.1%. If the growth is 2.2-2.5%, then the dollar, perhaps, is not in danger until Wednesday. But if 1.8%, it cannot avoid sales. So, dollar current price seems to us extremely attractive for its sales. Meanwhile, the VIX Index ( it is also known by other names like "Fear Gauge" or "Fear Index) dropped to Multi-Year Lows. That is, traders and investors have calmed down. That calls into the question the safe-haven assets growth demand and explains yesterday's weakness of the yen and gold. Given then the level of volatility in gold has increased, we prefer to trade with the Japanese yen. Its purchase against the dollar is still relevant for us. Our trading recommendations for today: We will continue to look for opportunities for selling the dollar across the foreign exchange market entire spectrum, buying the pound against the dollar as well as against the euro, selling oil and the Russian ruble, and also buying the Japanese yen against the dollar. As for gold, in the oversold we buy and in the overbought area we sell gold.
Long
by Trade24Fx
Johnson and Pound, ECB and Euro, US and ChinaBoris Johnson becomes the UK's new prime minister and, made his first statement. Despite the apocalyptic forecasts, we could observe a pound growth on Wednesday. Once again, chances that Johnson will have enough support to implement the no-deal Brexit are extremely low. An agreement with the EU or a general referendum is more likely to happen. In any case, until October 31, it’s not necessary to expect “exit without a deal”. And this means that buying pounds with current prices is a safe enough trading strategy, that could provide more than a solid income with minimal risks. So our recommendation is unchanged - we are looking for points for pound purchases across the foreign exchange market entire spectrum. Speaking of the euro. Perhaps, he is today the “prospective candidate” for sales against the pound, as well as it is quite possible to buy it against the dollar. Markets cautious with that fact that today the ECB may start to reverse the easing of policy, therefore the euro is trading at the very bottom of the medium-term range. We do not think that it would happen. The ECB is quite a conservative Central Bank. It would rather wait for the Fed to lower the rate, obtain additional economic data, update its economic forecasts, and just after that n begin to act at the beginning of September may be, but not now. So its purchases against the dollar seem like a good trading idea. We are actively buying EURUSD - the risk/reward balance is too enticing: with stops 40-50 points with a potential profit 200 points. Stops must be put up necessarily, because the Eurozone economy is in a bad form, and theoretically could provoke the ECB to act. Yesterday's data on the EU economic loco - in Germany came out weak. The PMI index in the production sector was only 43.1 (with the forecast was 45.2). the minimum level over the last 7 years (!). The PMI index in the Eurozone manufacturing sector also came out below 50 and again worse than forecasts. Unexpectedly the data on new homes sales in the USA came out quite positive( which grew by 7.0% to 646,000 (expected + 5.1%)). However, we will not revise our position on the dollar and continue to look for points for its sales. Meanwhile, the US and China are trying to get on well. On Monday, the US delegation is going to China to find a compromise. There is still no progress in the negotiation process, the IMF lowered forecasts for the growth of the world economy, again. Forecasts in connection with the slow-down in growth of the world economy. was reduced by 0.1% to 3.2% and 3.5% for 2910 and 2020. So, purchases of the Japanese yen continue to be relevant. Our trading recommendations for today: we will continue to look for opportunities for selling the dollar across the entire spectrum of the foreign exchange market, buying the pound against the dollar as well as against the euro, selling oil and the Russian ruble, and also buying the Japanese yen against the dollar. As for gold, buy it from oversold and sell in the overbought zone.
Long
by Trade24Fx
New British Prime, Yen vs.GoldBoris Johnson became UK prime minister after the decisive Tory vote. He beat Jeremy Hunt comfortably, winning 92,153 votes to his rival's 46,656. What does this mean for a pound? The entrance to the turbulence zone. The Brexit negotiations, which were essentially frozen for several months, will again enter the active phase. Johnson is known for his attitude to Brexit: exit from the EU. What does this mean for a pound? A strong decline due to no-deal Brexit. What is the likelihood of this scenario? In our opinion, extremely low. The British Parliament has already made it clear that Johnson simply will not gain votes for this. Which leads us to the logical conclusion - would not be accepted a no-deal withdrawal. This means that the current price of a pound is a great opportunity for its cheaper purchases. Is there any chance that the pound will decline more? Definitely yes. Possible decline in pound price is recommended to be used as a possibility to increase the size of the longs in it. Meanwhile, Analysts at Goldman Sachs analyzed options for investing in haven assets and concluded that the Japanese yen is a good option. Motivation - gold is too volatile. This significantly increases the risks of such investment, when the yen looks less risky. Another argument in favour of yen. This year, gold has already increased by 11%, and the Japanese yen - only by 1.6%. That is, from a position of overvalued/undervalued yen looks undervalued against the overvalued gold. Well, the final argument in favour of yen purchases - in case of interventions from the US, the USDJPY price will decline sharply. Recall, we have been recommending selling USDJPY for a long time. As for our other trading recommendations for today, they are unchanged. We will continue to look for opportunities for selling the dollar across the entire spectrum of the foreign exchange market, buying the pound against the dollar as well as against the euro, selling oil and the Russian ruble, and also buying the Japanese yen against the dollar. As for gold, considering how high it climbed, for the time being, we will trade it with no clear preference, buying from oversold zones and selling in overbought zones.
Long
by Trade24Fx
China concessions, oil and IMO 2020, BoA listYesterday was not that eventful for financial markets. As for the general background, the Chinese state media that Sino is ready to make concessions to the United States (mainly, it is about importing food from the United States) and is preparing for “personal” negotiations with the United States instead of current telephone diplomacy. In the oil market, despite the external calm, everything is quite alarming. Theresa May convened an emergency meeting in response to Iran seizure of a British tanker in the Strait of Hormuz that have led to an increase in tension. However, the effect was limited in forcing price levels, as the markets do not want to develop a conflict. Today we want are writing about the upcoming revolution in the oil market and the IMO 2020 standard. One of the main oil consumers are ships that burn 3 million barrels per day. So from January 1, 2020, the International Maritime Organization (IMO) tightens standards, reducing the maximum sulfur content in marine fuels (from 2.7-3% to 0.5%). Shipowners will begin to reorient their ships to such clean fuels as LNG, which could significantly reduce the oil demand. And more about the prospects. Bank of America identified the most “overheated” markets and assets, as well as identified positions that look most threatening in case of problems or force majeure. These are US treasury bonds purchases, the US technology sector shares purchases, and purchases of investment-grade bonds. So if you have such positions you should think about whether it’s time to close them or replace. As for our trading recommendations for today, they are unchanged. We will continue to look for opportunities for selling the dollar, buying the pound against the dollar as well as against the euro, selling oil and the Russian ruble, and also buying the Japanese yen against the dollar. As for gold, considering how high it climbed, for the time being, we will trade it with no clear preference, buying from oversold and selling from overbought zones.
FX:USOIL
by Trade24Fx
Preparing for ECB and UK Prime MinisterTrump said Thursday that a U.S. Navy ship had destroyed an Iranian drone in a “defensive action,” escalating already high tensions in the Gulf region. On the next day, Iran dismissed the report. So, investors’ reaction was expressed by rescuing in safe heaven assets and it is understandable. Later, the gold price was correlated with a decrease in the gold price. By the way, on Friday we recommended to sell gold, so those of our readers who followed our recommendation had to earn good money. We have already recommended selling the oil (see our previous reviews) so, those of our readers had a chance to earn good money by selling oil (one of our main trading recommendation). So this week we continue to look for the opportunity to sell the asset, but be careful it is all about the unstable situation. There was a lot of talk about a possible dollar intervention last week. It hadn't got to that part yet but the risk should be disregarded. The easiest and risk-free option to trade in such case is a short dollar. Moreover, at the end of the week, we are waiting for the outcome on US GDP. So this week we will continue to look for points to open short positions on the dollar. Primarily against the Japanese yen and the British pound. This week (on July 24th ) a new prime minister should appear in the UK. Odds are about 100% that Boris Johnson is going to be. In this regard, attention to Brexit among participants of the foreign exchange market is increased sharply, which means pound volatility will increase significantly. Our midterm position - short-pound. But let us warn you, some days it is quite possible the pound could be sold out quite tough. Nevertheless, we do not doubt the final outlook for its growth. We will buy a pound not only against the dollar but also against the euro. And against the euro, this can be done in double volumes. EURGBP has climbed very high, and its decline seems to us the most likely scenario. The reason for its sales may be the outcome of the ECB meeting, which will be announced this week on Thursday. If the Central Bank gives us a hint to easing monetary policy, sales in EURGBP cannot be avoided. So we took a medium-term short position in EURGBP and look forward to a jackpot.
Short
by Trade24Fx
The Gold Rush, pound success & our recommendations for todayRay Dalio is the founder of the world's biggest hedge fund firm, Bridgewater Associates, which manages $160 billion. An American businessman with an estimated net worth of $16.9 billion. He recently has published a quite interesting essay on his LinkedIn account. Ray Dalio thinks the current era of low interest rates and quantitative easing might be coming to an end, paradigm that could see escalating conflict between capitalists and socialists is simple - gold. “I believe that it would be both risk-reducing and return-enhancing to consider adding gold to one’s portfolio,” the billionaire founder of investment management firm Bridgewater Associates said in a 6,000-word essay posted on LinkedIn. The logic of his thinking is approximate as follows. The debt market is becoming less and less investment attractive due to the low profitability caused by the ultra-soft monetary policy of the leading central banks. As a result, it is quite logical to assume that they want to redirect their capital from the debt markets to others. But the problem of many countries is that they freeze to debt markets forming the Ponzi, which is based on the constant debt refinancing. If investors stop lending money the currencies and stock markets will be among the victims. The stock market bubble will burst under such conditions, therefore, it is necessary to seek alternatives. According to Dalio, gold is ideal for investing - this will, on the one hand, reduce risks, and on the other, increase profitability. Yesterday turned out to be quite successful for the pound buyers. The reason for the growth was unexpectedly good UK retail sales outcome: + 1.0% m / m, with the forecast of -0.3% m / m. As well as comments from the main representative of the European Union at the Brexit negotiations, Michel Barnier, who said that the EU is open to negotiations about the Irish border status. Our position on the pound today is unchanged - we are looking for points for its purchases. Our other trading recommendations: we continue to look for opportunities to sell the dollar, oil and the Russian ruble. Gold has definitely climbed high so today we will sell it. As for Friday, your attention should be paid to Canadian Retail Sales, as well as The Michigan Consumer Sentiment Index .
FX:XAUUSDShort
by Trade24Fx
FOREX, ruble, August and Jaroslaw KosatyThe fact that there was no fundamental force majeure yesterday led to the “calm” Wednesday. In fact, the last statistics outcome prepared in line with forecasts as well as UK inflation rate. After crossing the new local Minimum yesterday, the pound “changed the situation” in the afternoon. So, we recommend looking for points for its buying. Traditionally we cannot but mention Mr Trump’s Twitter account which he uses as “negotiation table”. “We have a long way to go as far as tariffs where China is concerned, if we want. We have another $325 billion we can put a tariff on, if we want,” Trump said. As the result Gold at 1430. So, we recoomend to sell gold from these points, and buy it from these 1400. As for the Russian ruble sellings. Well, August is not “the luckiest” month for the ruble. “ August's” Force majeure situations, as well as fundamental negative have affected the ruble. Start with the August Coup (1991) and default (1998) to Kursk submarine disaster and Russian-Georgian (2008) and Russian-Ukrainian wars (2014). In this light, Jaroslaw Kosaty, a currency strategist at Poland’s largest bank, sees the currency sinking about 9% against the dollar by the end of the year. His forecast of 69 rubles per dollar. The reason is that Bank of Russia’s switch to monetary easing. Therefore we recommend selling Russian ruble. The Federal Reserve abandoned foreign-exchange-market intervention. Recall that a strong dollar is on Trump’s way. As a result, his verbal attacks are becoming more aggressive and let the markets suspect that the United States will move from something in mind to something in kind. Treasury can intervene without the Federal Reserve's agreement (2000). We are waiting to see if it happens again. But the rick factor exists. The most interesting trading option is short dollar. Therefore, we continue to recommend looking for points for dollar sales in the foreign exchange market. Our trading preferences for today are as follows: sell US dollar, oil, ruble and gold, but buy the pound.
Long
by Trade24Fx
“hard” Brexit & pound prepares for the worstGreat Britain expects “hard” Brexit. Jeremy Hunt and Boris Johnson faced off in leadership debate. The candidates were asked about the Irish border (which will become the only land border between the UK and the EU after Brexit). Both were clear that the issue will not be resolved with a positive outcome. The odds of No-deal Brexit are rising. Due to this, the pound treated with selling yesterday. Back to status in employment on the UK labour market. The estimated employment rate : + 25K with a forecast + 45K. Requirements to receive unemployment compensation rose to + 38K (last month figure 24.5K). Brexit continues to be the main driver of everything that happens with the pound over the last couple of years. It's a buying opportunity as the pound price is low. It is necessary to act without “fanaticism”. Recall, new UK prime minister will appear next week. Negotiations are progressing well towards concluding an agreement between the US and China. Treasury Secretary Steven Mnuchin said he and U.S. Trade Representative Robert Lighthizer may travel to Beijing for trade negotiations. US retail sales rose 0.4 per cent that is better than expected. However, we still do not plan to buy a dollar and we will continue to look for points for its sales in the foreign exchange market Our trading recommendations for today: sell the dollar, oil and the Russian ruble. We buy safe-haven asset: gold and Japanese yen.
Long
by Trade24Fx
1
Sino, Trump and bitcoin and pound We have already written about the Chinese GDP. 6,2% quarterly GDP rate of growth is the lowest accession rate in history. This is a trade war direct result. Price decline in the financial markets is responsiveness to the deceleration in economic growth. So, oil sales deals are attractive. As well as safe-haven asset demand growth, so we recommend to sell USDJPY but buy gold. Mr Trump is behind the 20% decrease in bitcoin price which is desperate for maintaining $10 000 level. Donald J. Trump on Twitter: I am not a fan of Bitcoin and other Cryptocurrencies, which are not money, and whose value is highly volatile and based on thin air. Recall, Cryptocurrencies - “criminality and dope-pushers” pied-a-terre. Our recommendation for the Cryptocurrency market is unchanged. Any Cryptocurrencies price growth is a chance to sell it at a good price. The higher price the large amounts should be sold. Since Brexit remains on hold, the macroeconomics statistics will be the main pound price changes driver. On our point of view, the current pound financial quote is quite attractive for its buying. Weak data will likely to provoke another round of its sellings, therefore, pay attention and close the open deals based on new information in case of not satisfying data. Another important data pact is US retail sale data. Weaker data may provoke US dollar sales due to weak data appearance and the Fed reaction on. Recall, the markets are waiting for the Fed to cut the rates. And weak data on retail sales is signal in its favor. Our trading recommendations for today are as follows: sell the US dollar, oil, and Russian ruble. Buy gold and yen safe-haven assets.
BITFINEX:BTCUSDShort
by Trade24Fx
Consequences, oil surplus & dollar in troubleThe previous week provided quite eventful for the financial market. Now, the market expects the Fed to cut the interest rate this month. The probability of such outcome is 100%. So, there is a conundrum, reducing by 0,25% or 0,5 %? After two days of Fed Chairman Jerome Powell's testimony to Congress making the US dollar a weak player as a short dollar. The current downtrend is just a beginning as the US dollar is at extremum point. In addition, as the USA monetary policy has shifted supporting bearish trend. The one and only important data will be Retail Sales Report in the USA, therefore, we sell the dollar. Force majeure events are near term and not supporting the current market conjuncture that has been named as long-term Surplus. International Energy Agency 2Q 2019 the surplus was 900 000 b / d. As we can observe the OPEC + No. 2 did not precipitate the commodity deficit. Since 2011 oil consumer demand growth rate is at its lows, we will sell the oil. Trade war is the reason for all the trouble the economy is facing. China reported a data pact with macroeconomic data: GDP and industrial production growth rate, retail sales indicator. Despite the fact that the outcome is better than expected, GDP growth was 6.2%, which is below the minimum mark of 6.5%, which the Chinese Government put in its long-term development strategy. Earlier, China reported a decline in exports by 7.3%, and Singapore (one of the world's most export-dependent economies) reported a decline in GDP in the second quarter by 3.4% (the maximum decline since 2012). Our trading recommendations for today are as follows. We continue to look for opportunities to sell the dollar in almost all pairs (USDJPY, EURUSD, GBPUSD). Sell the Russian ruble and oil. We continue to sell the oil near the highs and buying from the lows.
FX:USOILShort
by Trade24Fx