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Fed Protocol, BoC, and the UKAs we all know “the market is addictive to news”, it is not wondering that yesterday’s testifying to Congress by Fed Chair Jerome Powell, the announcement of the Bank of Canada decision on monetary policy, as well as a fairly extensive block of statistical data from the UK, led to increased volatility in financial markets. Let's analyze these events in chronological order. Great Britain relaxed quite positive data, which triggered the pound growth. Recall, we recommended its purchases, so those of our readers who looked up to our advice made good money. GDP and industrial production value have increased we cannot but mention the data on construction and trade balance that pleasantly surprised, appeared much better than forecasts. Bank of Canada holds interest rate steady, Federal Reserve Chairman Jerome Powell said that rate cut is not a panacea. Jerome Powell’s testimony at Congress. Markets expected him to make statements/comments about the Fed rate cut. However, Powell noted that the risks remain steady for the US economy, due to business investment slow down caused by the trade war, while inflation remains weak, which suggests that interest rates might be reduced this month. After Powell's testimony, the minutes of the last FOMC Fed meeting were published. Which only strengthened markets confidence in lowering the rates in the USA. The discussion of the Fed members about the prospects for monetary policy at the last meeting showed that there is a strong bias towards cut rates. The result is a short dollar. But inflation statistics from the US, as well as the second day of Powell’s testimony, may well trigger a rise in volatility in pairs with the dollar. Our trading recommendations for today are as follows. We continue to look for opportunities for selling the dollar (USDJPY, EURUSD, GBPUSD). Sell the Russian ruble. We are looking for points for sales of gold, which again climbed very high.
Long
by Trade24Fx
Contradictory forecasts for oil & the Bank of Canada decisionThe dollar we recommend to sell against the main currencies duo to reasons absence (we still see no reasons for the Dollar Index new highs ).With the exception of the Canadian dollar. Extremely weak data on the labor market in Canada, published on Friday, amid excellent statistics on NFP from the United States, together with today's meeting of the Bank of Canada, can create ideal conditions for the pair to grow. Tightening monetary policy followed by the Bank of Canada however the gradual economic slowdown multiplied by the Fed's intentions to lower the rate, provide serious prerequisites for changing the vector of monetary policy. Well, today the rate is unlikely to be lowered, but there is a chance for this. This will harm the Canadian dollar, so today we will buy USDCAD. with, at least, 200-300 points, and stops set below 1.3050. Against the rest of the "major" currencies, we will sell the dollar. It is primarily about the Japanese yen, as well as the euro and the pound. Do not forget about Testimony of Fed Chairman Powell in Congress, which is quite possibly accompanied by important statements for the dollar. Future of oil price, that is a good thing to think about, therefore analysts have divided into several groups with a different view of the situation. Some (for example, analysts at JP Morgan) say that OPEC + creates prerequisites for the redistribution of market shares: OPEC + countries essentially “give” some part of their market share to the US and other countries that are not participating in the agreement. So, the oil team from the United States receives carte blanche for further rapid development. As a result, the total supply in the oil market does not fall. At the end, when the OPEC + participants start to engage in their market share and decide to “unscrew the tap”, this will only lead to a decrease in oil prices. That is a new reality is currently being formed on the oil market, in which the fair oil price is not $ 100- $ 120, but $ 60- $ 70. And it is likely that in the foreseeable future, this ceiling will fall to $ 30- $ 40. However, there is an alternative point of view. For example, the Saudi Minister of Energy believes that the situation will evolve according to the classical theory of cycles, which means that the current cycle will soon reach a peak, then change to stagnation, and then come down. In Geopolitics Central, they recall the threat of a military conflict between the US and Iran, which could lead to Iran blocking the Strait of Hormuz. And this will provoke a strong shortage in the oil market and, as a consequence, sharp rise oil prices rise. We are of the opinion that was voiced by analysts J.P. Morgan. The world has changed and it needs to be accepted. The shale revolution (from the supply side and the transition to alternative energy sources from the demand side ) have radically changed the balance of power in the oil market. And the attempts to “measure it” by the out-of-date methods are largely doomed. So we continue to recommend oil sales. Our other trading recommendations are unchanged: we sell the Russian ruble, and for gold, we work without any special preferences - buy from hourly oversold zones and selling from overbought.
FX:USOILShort
by Trade24Fx
The threat, problems, and preferencesTurkish President Recep Tayyip Erdogan removed Murat Cetinkaya as the central bank governor. In fact, this is an attempt to threaten the Central Bank of Turkey of independence, so the country's monetary policy is fully synchronized with the Government’s actions and objectives. Therefore crumbled. This is a wake-up call to the world. Recall, Trump continues to weigh heavily against the Federal Reserve System, he wants a cheaper US dollar and Tight Monetary Policy. As a result, the Fed is facing another dilemma. The fact is that RATE-CUTTING could be perceived as a “response” to Trump's pressure. So there is a risk that the Fed may postpone the rate reduction in order to show that their actions are completely independent. However, we consider this option unlikely. So our recommendation to sell the dollar on the intraday basis as well as mid-term position. The head of Russia’s State Statistics Service (Rosstat), who had been responsible for Russian statistics since 2009, was removed from his position however the Russian economy is still weak. PMI indices in Russia in June went below 50 (it means a decline in business activity). It is not about crossing the mark below 50, but at the rate at which the indicators are deteriorating. For example, back in May, the PMI index for the service sector was 52 (in June 49.7), and for the industrial sector - 51.5 (in June 49.2). So the rate at the end of June dropped sharply, updating the 2016 minimums. So, our recommendation to sell the ruble at any convenient opportunity. Our trading plans and ideas are as follows. We will continue to look for points for dollar sales. We work on gold without special preferences - buy is at overbought and sell at oversold price levels. USDJPY we will sell. Medium-term purchases of pound and euro are still attractive. We will sell the Russian ruble, as well as oil.
Short
by Trade24Fx
Results of the week, dollar, gold, ruble and oilLet’s summarize the previous week. It began with the G20 summit outcome announcement, namely, Trump and discussed possible resolutions to the trade war that's dragged on between the world's two largest economies. The OPEC extends production cuts for 9 months, The non-farm payroll (NFP) released surprisingly positive figures in its report. But to say that, clarity reigns in the financial markets we cannot. The US and China negotiations do not guarantee anything, Trump still institutes a dollar devaluation policy. Actually, watching the gold dynamics last week, it is easy to understand that the markets are not sure about anything. Daily spikes in gold price ( 30-40 dollars ) is a testament to that. Well, the maximum daily maximum increase over the past three years shows that nothing has been decided yet. As a result, many analysts continue to “bet” on the gold growth in the future. Considering the strongest uncertainty, we still adhere to neutrality in matters of gold trading. Today we tend to buy gold on the intraday basis - its current price seems too attractive. The OPEC influence is mitigated, but oil production in the United States continues to set new records, changing the layouts on the oil market and forming a new market reality. Our position on oil - look for points for its sales, we set positions with fairly rigid stops. We were pleasantly surprised by the United States Non-Farm Payrolls + 244K. beating market expectations of 160 thousand. The markets still believe in a rate cut, but after Friday, a few people bet on 0.5% rate cut, right away. Weak figures would be the final verdict to the dollar. Against the background of such statistics, the Central Bank has many options. So, We look forward to hearing the Jerome Paella. We are waiting for another major event Bank of Canada meeting results. In general, the markets do not expect any surprises, but comments with instructions on changing the vector of monetary policy are possible. So in pair with the Canadian dollar might be volatile on Wednesday Russia's Central Bank head Elvira Nabiullina said that Bank of Russia will reduce the rate by 0.5% The ruble naturally experienced weakness and declined in the foreign exchange market. We recommend its sales. We will continue to look for points for dollar sales. Gold price falling on Friday, we will use it as an opportunity for its purchases. We sell USDJPY. Medium-term pounds purchases look attractive. we will begin to build up a long-term position with EURUSD. In addition, we will sell the Russian ruble, as well as oil.
Long
by Trade24Fx
NFP, Trump's obsession, Morgan Stanley's recommendationsGetting ready for the NFP, Trump's obsession, recommendations of Morgan Stanley The financial markets are having a torrid week. Financial market participants are concerned about the appearance of a trend that the market currently is following. The concern is about the statistics based on the US labor market outcome, which in the future might provoke the US economic slowdown. Let's try to figure out what we should and should not be expected after the outcome will be published. It seems like nobody wants to undertake an in-depth analysis of the current state of the economy and labor market, a matter of reasonable inference from “how the forecast has been calculated”. The formula is, therefore, as follows: take the simple arithmetic average of the NFP index over the last couple of years, that is all. Such an approach practically guarantees that actual data will be different from forecast data. That in itself carries an opportunity for earnings. NFP report outcome creates adverse expectations. We believe that the 160K figure is too optimistic according to the ADP outcome. Since we are expecting poor forecast data, our trading recommendation is - sell the dollar. Moreover, the markets are concerned about possible US interventions against the dollar in the foreign exchange market. Recall, Trump supports the dollar devaluation idea. Last time the United States came out with interventions on the foreign exchange market was in 2011. Recently, USD to YEN rate forecast has been sharply lowered by Morgan Stanley’s analysts: from 108 to 102 at the end of this year and from 98 to 94 at the end of the next year. Motivation - a sharp decline in profitability differential: the profitability of American assets decreases faster than the profitability of European and Japanese. Recall that it is not the first time we recommend selling USDJPY. As for our other recommendations, we will continue to look for points for sales of the Russian ruble and oil. We are working with gold today with no clear without any preference for oscillator signals. In addition, we recommend paying attention to USDCAD. The fact is that today, statistics on the labor market of Canada will be published. So in the case of a double positive or double negative, the USDCAD may be subjected to strong pressure (ascending or descending). The best option for trading, in this case, is trading on the news. 1-2 minutes before the news releases, we set pending stop orders in both directions (buy and sell) with 30 pips at that time and wait for the news to come out. Almost certainly the movement will be strong and unidirectional. That will lead to the execution of one of the orders and will make it possible to earn quite quickly without any particular risks.
Short
by Trade24Fx
1
ADP, ECB’s new head & July 4thThe publication of data on employment in the US private sector from ADP was the main even. Considering that official statistics from the US Department of Labor will be published tomorrow, traders and other financial market participants are expressing interest in. Analysts had expected growth in May (140K) however, the number is + 102K, only. On the one hand, the data is lower than forecast, on the other hand, it is significantly higher than the previous frankly disastrous numbers (recall that last month the increase was 27K, only). Well, this is a rather alarming signal. Also yesterday, data on the US trade balance was published (- $ 55.5 billion with a forecast $ 54.0). Our recommendation is “sell the dollar”. Especially, if you remember Trump's attack on the dollar. Traditionally, in Twitter, the President of the United States called for the devaluation of the dollar. And about the weak UK business activity data (Composite PMI index went below 50, that is 49.7), which increased the downward pressure on the pound. It’s too late to sell the pound and too early to buy. A similar index was published in Eurozone. The situation there is better (52.2 with the forecast 52.1). So, euro purchasing is not a bad idea ( on the intraday basis). Ms Lagarde was honored to have been nominated for the ECB presidency. According to experts, Lagarde will adhere to a stimulating monetary policy aimed at ensuring economic growth in Europe. So, the euro might be under pressure. We expect low liquidity in financial markets due to a holiday in the USA (Fourth of July – Independence Day). The “weak” market may well surprise in the form of volatility explosions, so today it is worth trading with caution. Our trading recommendations for today: we will continue to look for points for dollar sales as well as the Russian ruble. Since AUDUSD has finished the day with a 0.7020 mark, we do not sell it, duo to further growth. Sell oil. As for gold, today we are working without obvious preferences on the oscillator signals.
Short
by Trade24Fx
2
ECB signals, US threats, Roubini ’s predictions, and ruble limitDespite the extremely weak statistics from the Eurozone published on Monday and rather depressing data on producer prices, published on Tuesday, the euro tone was relatively good in the foreign exchange market yesterday. The reason was the information that the ECB is not ready to resort to additional monetary incentives. Therefore you should not expect to ease monetary policy. Despite the record series of the US economic growth, a lot of experts continue to fear for the global economy a bright future in general and the United States in particular. So Nouriel Roubini in a recent interview noted that we might be headed for another recession. The world central banks have essentially exhausted their limit of instruments (it is simply impossible to easy monetary policy for many countries), and, at the same time, the debts of countries are increasing, which is a serious threat. The trade war is a trigger for recessionary processes says, Roubini. The US seems to be interested in Europe, again. The United States, in an ongoing dispute over subsidizing the aviation industry (the European Union illegally subsidized Airbus Corp), is considering imposing tariffs on an additional 89 items with an annual trade volume of $ 4 billion, including cheese, pasta, whiskey, metals, and chemical products. In this light, a sharp increase in gold is quite understandable. Meanwhile, the majority of respondents believe that the ruble has reached its ceiling and it’s simply no way to grow to, Bloomberg's latest monthly survey found. In the future, the decline of the Russian currency is inevitable. Moreover, the state itself is interested in a weak ruble. Recall that the existing budget rule is aimed at artificially creating an imbalance in the foreign exchange market in favor of the dollar and against the ruble. For instance, since the fiscal rule has been imposed, the ruble fell against the dollar by almost 5%, but at the same time, oil prices rose by 17%. That is, the ruble becomes cheaper even if oil prices rise. Well, if they start to fall, it will just be cheaper as well but faster. In this light, it is useful to recall our constant recommendation to sell the Russian ruble on its any growth. In terms of macroeconomic statistics, yesterday was relatively calm in terms of macroeconomic statistics. The index of business activity in the construction sector showed its lowest figures since 2009 (43.1, with forecast of 49.3). Data on employment in the US from ADP is what we are interested in today. Recall that last time they signaled about future problems in the data from the NFP. So we closely monitor the indicator and prepare to sell the dollar in case of its failure. In addition, we are waiting for data on business activity and the trade balance in the United States. Our trading recommendations for today: we are looking for points for sales of the dollar and the Russian ruble, as well as AUDUSD. We sell oil. We can not but note that gold current price is extremely attractive for sales, but do not forget to be careful.
OANDA:XAUUSDShort
by Trade24Fx
1
US record, OPEC decision, Australian dollar under threatOn Monday, the markets continued to try to incorporate with the prices the G20 summit results. What Trump declared to be the victory in a trade war but is actually not. So, yesterday we observed the appearance of inefficiencies in financial markets that could be used to make money. In particular, we are talking about the gold falls into the bottoms of 1380-s, which can and should be used for asset purchases and earnings, as well as the growth of the Australian dollar above 0.70, which should be used to sell AUDUSD. About the Australian dollar. Today, the Reserve Bank of Australia cut the rate for the second time in a row (this time from 1.25% to 1%). We believe that this is quite a serious signal to sell AUDUSD. Ideal prices for opening short sales are in the area of 0.7000-0.7020. In this case, stops can be placed above 0.7040, and profits - in the area of 0.6870. Yesterday could be decisive for the dynamics of oil over the next few months. But the outcome of the OPEC meeting was too obvious. The cartel decided to extend the OPEC + No. 2 contract for 9 months until March 2020. Current progress in a trade war is a positive sign for oil. Well, all points are in favor of asset purchases. However, there might be a trap. Given the current consensus, oil growth will need something more than just an extension. For example, an increase in the volume of reductions or some additional conditions that narrow the supply on the oil market. But these conditions remained unchanged. In addition, a potential uncertainty factor is a participation in deal countries outside the cartel. Today, Russia and other countries must agree on their decision and position. At best, they will agree with the OPEC deal, which is already taken into account in the price, at worst they can announce their particular position, which can be an unpleasant surprise for buyers. Total, while oil is below $ 60 (WTI brand), we recommend selling it. We put small stops in this case (above $ 60.40), but profits can be set fairly solid, up to the bottom $ 50. Meanwhile, the United States recorded a new record: 121 months of continuous economic growth. This is a record in the entire history since 1854. Given the potential easing of monetary policy by the Fed, the United States has good chances to extend this series, as evidenced by yesterday's data on US business activity. The ISM index in the non-production sector in June was 51.7 points (forecast: 51.0), which testifies in favor of the growth of economic activity in the country. What cannot be said about the Eurozone, where the PMI index in the manufacturing sector in June was significantly lower than 50 (47.6, with the forecast of 47.8) and was the lowest since 2013. Unpleasantly surprised China, whose PMI in the manufacturing sector was also below 50 (49.4). Our trading preferences for today are as follows: we will continue to look for convenient sales opportunities for the dollar and the Russian ruble. In addition, we will continue to sell AUDUSD. We are selling oil today, but we are closely following the outcome of the OPEC meeting. As for gold, we will continue to work without obvious preferences, selling from overbought and buying from oversold.
FX:USOILShort
by Trade24Fx
G20 meeting results, OPEC & tough weekThe G20 meeting was the main even however the markets were not so much interested in the summit as in one particular meeting Trump - Xi. At stake was the fate of trade negotiations between countries. Markets have been waiting for the end of the trade war. As we expected the leaders Trump and Xi agreed to resume trade negotiations on Saturday, June 29. The main surprise was the decision to allow US companies to sell Huawei products. Against the background, safe haven assets have naturally undergone sales. However, returning to the negotiating table is not the end of the trade war. So today we will and buy gold, as well as the yen. For instance, sell USDJPY around $108.50 mark, and buy gold around $1385 mark. While the markets are preparing for the OPEC meeting and the extension of OPEC + №2 (95% of the polled experts believe that the contract will be extended), and even its expansion, the US continues to take advantage of the moment and increase oil production. Oil production in the United States in April exceeded 12 million barrels per day, thus setting a new record. And the number of active oil installations in the United States has increased again. This time, according to Baker Hughes, it has increased by 4 pieces. OPEC members will meet later on Monday. On Tuesday, the Reserve Bank of Australia may reduce the rate (in this light, we recommend paying attention to AUDUSD sales). In addition, data on business activity in the US will be published and data on the NFP will end up the week. Our trading preferences this week are as follows: we will look for points for sales of the dollar and the Russian ruble. Sell USDJPY, in addition from now on we will build up a short position in the AUDUSD pair. Oil is still paused until the OPEC meeting results announcement. As for gold, this week we will work without obvious preferences, selling from overbought and buying from overselling areas.
Short
by Trade24Fx
Peaceful US and GDP data & Bitcoin is blowing a bubbleYesterday, a fairly clear signal from the United States was received by markets and China. The USA is interested in a peaceful outcome. The information that the United States has decided to postpone the introduction of additional tariffs on Chinese goods (over $ 300 billion). Treasury Secretary Steven Mnuchin said: ‘We were about 90% of the way’ on China trade deal and there’s a ‘path to complete this’. American companies found a way to circumvent the ‘Huawei’ ban. Recall, we have advised selling gold at USD 1430-1435. So those ones who followed our recommendations would have earned good money. The correlation between cryptocurrency prices reached 21% (!). We believe that there is nothing behind such growth and another price bubble will burst soon. Once again, we note that there is no logic in growth. A surge of optimism among buyers after Facebook “Libra” was announced is actually an odd thing. If Facebook had announced that Bitcoin is its reference currency, then yes, it would be possible to understand the current growth and even consider it reasonable. But we are talking about the emergence of a superpowerful competitor to Bitcoin, which will get the lion's share of the market and buying Bitcoin on this background is illogical at least. So we continue to recommend sales of key cryptocurrencies, Bitcoin primarily. As for the macroeconomic statistics published yesterday, orders for durable goods in the United States were frankly failed (-1.3% with a forecast of -0.3%), and the trade balance also turned out to be much worse than experts' expectations ($ 75.5 billion against forecasts - $ 71.8 billion). Nevertheless, the dollar felt quite confident in the foreign exchange market. However, today the situation might change. US WPF data might be unpleasantly surprised, and then the dollar simply will have no options than to decline. Our trading preferences for today: we will look for points for selling the US dollar against the Japanese yen, the euro and the pound. And also we will actively sell the ruble both on the intraday basis and the medium terms. As for gold, today we, perhaps, will work without obvious preferences, buying and selling gold on the intraday basis in its oversold / overbought levels.
BITFINEX:BTCUSDShort
by Trade24Fx
1
1700 per ounce of gold, another crisis signal, Powell's speechFed’s monetary policy vector changes, the pressure between the US and Iran has reached a critical level, the overall high level of investor concern led to the fact that gold almost reached 1140 yesterday. As a result, an increasing number of traders and analysts are turning into purchases. In particular, Marc Chandler from Bannockburn Global Forex believes that a breakdown of 1400 opens the way for gold to 1700. We are far from being so optimistic and we will look for points for its sales. In the meantime, analysts are continuing to look for signals about the coming crisis. Earlier, it was the inversion yield curve inversion, the departure of the Real Monetary Proposal to zero, the cycle theory, the decline of America's auto industry. The Fed is changing its approach to monetary policy by changes tightening and so on... Small-cap companies, as well as transport company stocks relative to the SP500 index dynamics, have shown the worst dynamics since 2009 (!). In theory, small-cap companies should grow much more actively than high-cap companies. And we are now seeing a kind of inversion. This inversion, according to analysts, is a disturbing signal and is a harbinger of the coming crisis. Data from the United States came out quite weak. New home sales also disappointed with 626k, missing expectations of 684k, as was the Conference Board said its consumer confidence index dropped 9.8 points to a reading of 121.5 this month, the lowest since September 2017. Jerome H. Powell, chairman of the Federal Reserve, said Tuesday that the downside risks to the US economy grew, but he avoided the topic of lowering rates. So the dollar received some support. Therefore we will use this dollar growth solely for the purpose of selling it more expensively. Today, surges of volatility in pound pairs are quite possible. The Bank of England (BOE) inflation report hearings will hog the limelight this Wednesday. Governor Mark Carney’s testimony will be closely heard, in the face of the recent dovish tilt. Note that the hearings will be on the May inflation report. In addition, data on orders for durable goods and the US trade balance may well lead to the formation of local trends in dollar pairs. Our trading preferences for today: we will continue to look for points for sales of the US dollar against the Japanese yen, euro, and pound. We continue to wait for a gold correction and look for points for its sales. And also we will actively sell the ruble both on the intraday basis as well as medium term.
OANDA:XAUUSDShort
by Trade24Fx
Top 3 assets to sale, Libra, Trump and PowellDescribing yesterday cannot fail to mention that the markets are still following the current trends. The short dollar is one of them. The Fed's policy was criticized by Mr. Trump again. Also, praising himself Tump could not but notice that June may be turn out to be a fruitful one. The pressure that has been put on the fed carries a goal, the achievement of which is leading to dollar decrease. A sharp easing of monetary policy in the USA could hit the dollar a lot. Fed's interest-rate cut is leading to the short dollar. The USA and Iran relations are particularly fraught, against this background, gold became one of the main "beneficiaries" and settled above $1,400 ( has reached a peak since 2013). Nevertheless, we believe that the current price is a deviation from the norm than an adequate and fair price of gold, taking into account the facts available, rather than expectations and rumors. So, gold selling strategy seems to us quite an interesting and promising one. But you need to be aware that sales are at odds with the current market will, therefore, set small stops. Another interesting and promising position is the sale of the ruble. The information that Russia is planning to spend tens of billions of dollars from the Welfare Fund to revive economic growth (despite the fact that the Fund’s size is already falling rapidly: if its size exceeded 75 billion in 2017, it was less than 59 billion in June 2019). Especially when you consider that last year the Reserve Fund of the Russian Federation was exhausted (more precisely, it was formally attached to NWF, but it changes nothing). The lack of financial resources is so strong that most inviolable stocks are used. And if the oil drops below 35-40, then there will be simply nothing to protect the ruble with. And the last one but not the least one asset for sale is cryptocurrency (in this case it does not really matter what you will sell Bitcoin, Ripple, Ether or something else). Libra cryptocurrency has injected new vitality into the cryptocurrency market. At least, the current price for leading cryptocurrencies and their dynamics so far are clearly hinted at this. We have already noted that we do not share this optimism. In our opinion, no revolution has happened. Libra is a cryptocurrency and electronic money hybrid, rather than a cryptocurrency. Libra will have both an issuer, regulation, and security (all this contradicts the essence and basic concept of Nakamoto). So the current surge in prices on the cryptocurrency market is a great opportunity to make money on sales. But again, do not underestimate the " crowd madness" and should be ready to move against the open position and being "underwater". Today we are waiting for the real estate market, data on business activity and consumer confidence statistics to be announced, as well as Mr. Powell's speech. Our trading preferences for today: we will continue to look for points for sales of the US dollar against the Japanese yen, euro, and pound. We continue to wait for the correction in gold and look for points for its sales. And also we will actively sell the ruble both on the intraday basis and the medium term position.
FOREXCOM:XAUUSDShort
by Trade24Fx
1
G-20 meeting, OPEC meeting & rubleThe last week was not that calm. The Fed on Wednesday it clear that they are ready to reduce the interest rate. Some of the analysts are predicting the dollar falls in the near future by 5 - 10 %. So, we are looking for dollar selling points this week. On Friday the ruble buyers experienced an unpleasant moment when the ruble literary has collapsed and lost 1 % of its value. The reason is that US lawmakers are proposing to impose sanctions against the public debt of the Russian Federation in response to Russia's intervention in the elections. Recall, we recommend to sell the ruble and the current price looks extremely attractive. As for the new sanctions, for now, this is just talking, but the reaction the ruble reaction shows that it is vulnerable even to simple rumors. Boris Johnson and Jeremy Hunt are confirmed as the final two. Boris Johnson has led the voting so far, achieving more votes each time. A winner will be picked up in a month's time. And in the meantime, the candidates are In the process of rolling out their campaigns. The upcoming week is unlikely to be an easy one. The important macroeconomic statistics will be published (US GDP data also), two important events for financial markets will take place this week. This is the OPEC meeting, where the fate of OPEC + №2 should be decided. Accordingly, the oil market could get a boost for several months. And, of course, the G-20 meeting. First of all, we are expecting a signal about the end of the trade war. By the way, if such a signal appears, we strongly recommend paying attention to gold, which gets very high and is clearly ready to fall down. Our trading preferences for the week have changed: we will continue to look for points for selling the US dollar against the Japanese yen, the euro and the pound. But with gold purchases in the week, we slow down, at least, aggressive ones. We expect a correction in gold and prepare for its sale. The oil trade is paused, for the time being - until OPEC meeting result announcement. The ruble sales not only did not lose its relevance but also became the most attractive.
Long
by Trade24Fx
Repositioning FX and Trump's new warYesterday, repositioning was continuing in the foreign exchange market. Traders tried to incorporate the change in the vector of the Fed’s monetary policy into the dollar price. As a result, today the probability of a rate cut at the July meeting of the Federal Open Market Committee is 100%. At the same time, 65% of traders are waiting for a decline of 0.25%, and 35% - by 0.5%. Note that a month ago, the probability of a rate cut in July was estimated by markets at 20%. Since vector changing of US monetary policy is a tectonic thing not only for the US economy but also for the world economy and the foreign exchange market as well, it is naive to believe that the markets will fully take this into account in one day. So we continue to recommend looking for points for dollar sales. Moreover, Trump seems to be going to redirect his efforts from escalating the trade war to a currency war. A strong dollar reduces to zero his protectionist efforts. So the attack on the dollar seems quite logical. And even if we do not see active opposition on the currency front, such rumors will have a negative impact on the dollar, because everyone wants to be the first to sell the dollar before it drops. The Bank of England, as well as the Bank of Japan, decided to leave the monetary policy parameters unchanged yesterday. So, the Japanese yen and the pound moved in line with the basic trends of the foreign exchange market, without showing any particular individuality. About the UK. Boris Johnson won the vote for the fourth time and received 157 votes and left only 3 positions on the list of candidates. The end of the week is likely to be hectic. The markets have not taken into account the Fed's decision, and data on business activity in the Eurozone and the US, as well as retail sales in Canada, may well trigger a surge in volatility in the foreign exchange market. Our trading preferences for today: we will look for points for selling the US dollar primarily against the Japanese yen, as well as the euro and even the pound, sell oil and the Russian ruble, and also buy gold.
TVC:DXYShort
by Trade24Fx
Fed's patience snapped, Banks of Japan and EnglandThe Banks of Japan and England are announcing the results today. But, let's start by summarizing yesterday’s FOMC meeting. The Fed did not violate the established balance in the market and left the interest rate unchanged. As for the comments, then, as we expected, they turned out to be “dovish”. In particular, the phrase “to be patient”, which was the main motive of the Fed's statements lately, has disappeared. What does this mean? That the Fed is ready to cut the rate: 8 out of 17 FOMC members expect a rate cut by the end of 2019. The Bank of Japan has already announced its decision on monetary policy parameters, as we expected the parameters are left unchanged. Today we are expecting another decision from BoE. Well, the situation in the UK is tough enough, therefore the rate will be unchanged, on our point of view. We are not expecting the pound growth. So, any surge of volatility has to used to open counter positions ( in case of absence of clear fundamental contraindications ). What is that mean? If the pound jacks up, we will sell it in the area of daily hights. And if, on the contrary, it begins to sell, then we will look for opportunities to buy it. Once again, we do not expect the formation of directional movement in pound pairs following the meeting of the Bank of England. Meanwhile, in the UK, Mr. Johnson won the second round of the contest with the backing of 126 out of 313. And yesterday, Boris Johnson won a third successive ballot, with 143 votes. The remaining candidates are Michael Gove, Sajid Javid, and Jeremy Hunt. Our trading preferences for today: we will look for points for selling the US dollar primarily against the Japanese yen, as well as the euro, selling oil and the Russian ruble, as well as buying gold. As for the pound, we described the plan for working with it above.
TVC:DXYShort
by Trade24Fx
Fed & Dollar: Expectation and moves; Trump's tweets & EuroPresident Trump said Tuesday morning that Xi Jinping had agreed to meet with him at the Group of 20 summit next week. “We will be having an extended meeting next week at the G-20 in Japan. Our respective teams will begin talks prior to our meeting.” Trump wrote on Twitter. Markets are reacting to this tweet as a signal to relax. However, on our point of view withdrawal from safe-haven assets premature, the growth in demand for risky assets is a dubious idea. The thing is, the conflict parties need to be returned the the negotiation table. Also, Another news that triggered a surge in activity in the foreign exchange market was the statement by the head of the ECB, Mario Draghi, that the rate cut by the ECB is considered by the Central Bank as part of the tool for additional stimulation of the economy. Traders rushed to sell euros. We'll take it slow. Draghi voiced that have already been said by ECB's officials earlier. Well, interest rate management is the basic toolkit of the monetary policy of any Central Bank. So we do not share the enthusiasm of euro sellers and continue to recommend using such descents for its purchases. Well, the main event of the week will be the announcement of the decision of the Federal Open Market Committee on the parameters of monetary policy in the United States. Many people are waiting for lowering interest rates. But if you look at the likelihood of this event, then at the moment it is estimated at 22%, while 78% of traders believe that the rate will be left unchanged. But at the same time, the situation in July is radically different: only 15% believe that the rate will remain at the current level, and 85% think that the rate will be lowered (at least by 0.25% and 18% believe that the decline will generally be 0.5% ). The fact is that the current situation seems ambiguous, so we are supporting those ones who are supporting the lowering. On the one hand, the trade war is uncertainties and risks to the economy. But on the other hand, 10 years in a row, economic growth in the United States has actually shown that it is too early to panic. The data on NFP this month came out disastrous, but retail sales and industrial production in the United States showed good growth. That is, we have a certain balance in the pros and cons of the rate cut today. And this gives the most obvious reason for the US Central Bank to continue to withstand a pause. The question arises "what to do with the dollar ?". Here our position is unequivocal - sell. The chances that the Fed will give reasons for the revitalization of buyers are insignificant. Unless there will be an unequivocal statement about the inexpediency of lowering rates in principle. But the probability of this is extremely small. But the likelihood of the phrase that at the next meeting the rate may be lowered, on the contrary, seems to us quite possible. And this is a signal against the dollar. So, our trading preferences are unchanged: we will look for points for selling the US dollar primarily against the Japanese yen, as well as the euro and the pound, selling oil and the Russian ruble, as well as buying gold.
Short
by Trade24Fx
Bitcoin storming highs, ECB warns, & Fed preparesThe BTC cryptocurrency rate for the first time since May 2018 exceeded its highest level. The information Facebook Inc. has signed up more than a dozen companies including Visa Inc., Mastercard Inc., PayPal Holdings Inc., and Uber Technologies Inc. to back the new cryptocurrency that the social-media giant plans to unveil next week and launch next year. We consider the cryptocurrency market reaction as inadequate and irrelevant to the importance of the event. Well, the news looks impressive, at first glance.: Visa Inc., Mastercard Inc., PayPal Holdings Inc., and Uber Technologies Inc. invested in cryptocurrency. It would seem that it takes CTC market to a new level. But in fact, it does not. The amount of investment is about $ 10 million from each of the companies. Once again, not billions, but millions (!). On the scale of Visa or Mastercard, this is not even a mathematical error. That is, no revolution has taken place, and the current growth is making such a big deal out of everything. So we do not recommend to take the growth of cryptocurrency at face value. There is the trading proverb: “buy rumours, sell facts.” our advice is acting in accordance with it. So the growth of Bitcoin is a great opportunity for its sales, nothing more. Meanwhile, The ECB confused euro buyers, saying that the Central Bank is ready to take action at any time. It is about both reducing interest rates and returning to quantitative easing in the Eurozone if it needed to support the economy. For the euro, this is so-so news, but again - these are just words. No actual action has been taken yet. But in the United States, these actions could be committed on Wednesday, when the decision of the Federal Open Market Committee will be announced. So far, the markets are on the side of the unchanged rate, but there is a probability of decline, besides, comments are possible with instructions in favor of a rate reduction in July. But we will write more about it and what to do with the dollar tomorrow, that is, on the eve of the announcement of the Fed's verdict. Our trading preferences for today: we will look for points for selling the US dollar primarily against the Japanese yen, as well as the euro and the pound, sell oil and the Russian ruble, and also buy gold.
COINBASE:ETHUSDShort
by Trade24Fx
Tough week for foreign exchange market: the Fed, the BoJ & BoELast week turned out to be not that difficult. For instance, the data on industrial production was better than expected, also the data on retail sales appeared better as well, but still not that good. The Michigan Consumer Sentiment Index (MCSI)came out below forecasts, but the difference was minimal, and the dollar strengthened fairly well in the foreign exchange market on Friday. The dollar growth has been observed due to the Fed's possible future actions. This week the US CB is announcing the monetary policy decision. On the one hand, the weak data could convince the Fed to reduce the rate but on the other hand, Friday's data seems to have more influence in taking the decision. The Bank of Russia lowered the rate on Friday. Due to the economic situation in RF as well as the current decline in oil prices, we continue to recommend sales of the Russian ruble. The data on industrial production turned out to be lower than expected (5.0%, with a forecast of 5.4%). However, the weak data was offset by exceeding retail sales forecasts. The companies are concerned with the consequences of the trade war. Therefore, more than 500 companies and industry trade associations wrote to the White House urging Trump to remove levies on China and end the ongoing trade war. This week we are waiting for announcing the results of the FOMC meeting, BoJ and BoE decisions on monetary policy parameters, data on inflation statistics ( Eurozone, the UK, and Canada ) as well as data on retail sales from the UK and Canada. Our trading preferences are unchanged: we will look for points for selling the US dollar primarily against the Japanese yen, as well as the euro, selling oil and the Russian ruble, as well as buying gold. We will look for points for buying GBPUSD with small stops.
Short
by Trade24Fx
Attack on tankers, game of thrones of Britain & trading ideaAccording to media reports an oil tanker turned into a fireball after a suspected torpedo attack off the coast of Iran. A second tanker was said to have been targeted by a magnetic mine in a series of explosions. Oil rushed up as we expected. However, we consider this growth an opportunity for sales at a higher price. Considering that this week oil reserves in the United States have risen to its maximum value amounted 485.47 million barrels since July 2017. In general, over the past 3 months, oil reserves in the United States have shown a weekly growth rate of 10 times. The race to be the next British prime minister stared yesterday. Conservative MPs will now take part in a series of votes to whittle the candidates down to the final two. Any candidate who fails to secure at least 17 MPs' votes will be eliminated from the contest. Further ballots will be held next week, with the two most popular MPs moving to a run-off of Tory party members. Boris Johnson topped the ballot in the first round of voting (received more than 100 votes). His closest competitors, Jeremy Hunt(Secretary of State for Foreign and Commonwealth Affairs, and Michael Gove( Secretary of State for Environment, Food and Rural Affairs), received 43 and 37 votes. As you can see, the most likely winner is Boris Johnson. His position is more than tough - Brexit at any price. So, the pressure on the pound is likely to increase. In this regard, we will focus on finding points for selling pounds. Friday will be quite a busy day in terms of macroeconomic statistics. First of all, we are talking about the data on retail sales and industrial production in the United States, as well as the University of Michigan Consumer Confidence Index. In addition, attention should be paid to similar statistics from China. If the economy shows signs of a worsening economic halt (which is very likely), the forecast from Paul Tudor Jones is at least a step closer to its implementation. In a recent interview with the investment fund founder“Tudor Investment Corporation” and one of the best investors of our time Paul Tudor Jones. Gold is his favorite pick in the next 12 to 24 months. If it hits $1,400, it will quickly move to $1,700, he said. Motivation - US rates are likely to return to zero values again, and the trade war will slow down the development of the world economy. Our trading preferences for today are as follows: we will continue to look for points for the sales of the US dollar primarily against the Japanese yen, as well as the euro, sales of oil and the Russian ruble, as well as buying of gold and sales of GBPUSD.
Short
by Trade24Fx
US Inflation, damage to the global economy & PM BorisAccording to The Economist, the trade war between the United States and China has already caused the global economy irreparable damage, disrupting the supply chain that had been creating for several decades. The point is that, there are a lot of Chinese companies have found the way of delivery of goods to the United States. For instance, across Vietnam. The scheme is very simple: the label “Made in Vietnam” is glued to Chinese goods and the goods are sold in the United States without the additional costs associated with duties. The downside of this was the destruction of the old logistics chains, and the creation of new ones, apart from the general riskiness, requires additional costs. As proof of the damage, the information has been given as an example that the current business cycle is ending. Since the crisis in 2008, the world economy has gone through a very long period of recovery, and the business cycle usually enters a recession phase every decade. This assumption is confirmed by the data on exports from the developed countries, as well as exports from developed countries to other developed countries, which has fallen to its lowest level since 2009. In general, it is worth preparing for the worst. In this regard, we recall that our recommendations are buying safe-haven assets. It is worth noting yesterday's inflation data from the United States. Consumer inflation appeared below forecasts and reached the Fed target. This is quite an alarming signal for the dollar. Note, that the markets still believe that the Fed will leave the rate unchanged next week, but in a month in July, the US Central Bank will lower the rate by 0.25% (the current probability of this event is more than 80%). Meanwhile, Boris Johnson has launched his campaign to get a post of Prime Minister. His main slogan is "Brexit at any price". This is an alarming signal for the pound, because "at any price" includes a no-deal Brexit. In this case, the consequences for the UK economy as a whole and the pound, in particular, could be unpredictable. Our trading preferences for today are as follows: we will continue to look for points for the US dollar sales against the Japanese yen, as well as the euro, sales of oil and the Russian ruble, as well as buying of gold and sales of GBPUSD.
Short
by Trade24Fx
Mexican peso holiday & central banks are preparing for the worstThe week started quite well for the financial markets and with a huge relief for Mexico in particular. The point is that Trump decided not to impose 5% tariff on Mexican goods. The Mexican peso showed maximum growth over the past year. The Canadian dollar is below 1.33. Therefore a sharp decline in gold and other safe-haven assets against this background can be considered logical and logical. However, we would not advise relaxing. In fact, this is just one of the episodes. But in general, the picture continues to be rather precarious. According to analysts at Morgan Stanley, heightened market optimism is a mistake of investors. Global economic data is likely to begin to deteriorate. Accordingly, Morgan Stanley recommends selling USDJPY with a target of 105. We will continue to look for points to buy gold and Japanese yen on the intraday basis. About the Japanese yen. Yesterday, the head of the Bank of Japan, Haruhiko Kuroda, contributed a lot to yen sales in the foreign exchange market. He said that the Central Bank is ready to expand the list of monetary incentives, if it is necessary. Panicking and selling off the yen is not worth it yet. Well, the Bank of Japan is satisfied with the content of the monetary policy and the general state of the country's economy. Nevertheless, the general trend in the behavior of the leading central banks is pretty clear: all as one declare their readiness to act in response to trade war escalation. Recall, earlier "pigeon" comments were seen by the Fed and the ECB. And the Reserve Bank of Australia, so generally, lowered the rate last week. We would like to note rather weak data from the UK in particular GDP dropped by 0.4% m / m, in April ( the analysts had been expected a declining by 0.1% m / m).In addition, industrial production collapsed by by -2.7% m / m (experts predicted a decline of -1.0% m / m). It is not surprising that the pound was under downward pressure yesterday. Today we are waiting for data on the UK labor market, which might finish the pound. Well, we will see. Our trading preferences for today are as follows: we will continue to look for points for selling the US dollar against the Japanese yen, as well as the euro, oil sales and the Russian ruble, as well as buying gold.
Short
by Trade24Fx
Results of the week, 10 years of growth in US and plan for week The publication of statistics on the US labor market was the top story. We warned that the data will come out much worse than forecasts and recommended selling the dollar before the data has been published. Those of our readers who followed the advice should have earned good money. But back to the data. With the forecast of + 175K, in fact, the number of NFP was only + 75K. In addition, wage growth was below the expectations of experts. This is definitely bad news for the dollar, which is giving the Fed a reason to lower the rate at the meeting to be held next week. In this regard, our recommendations remain unchanged this week - we will look for points for its sales. At the same time, we cannot but note an important for the US economy anniversary - 10 years in a row of economic growth. Also, this fact is remarkable by the fact that if growth continues for another month, it will be the longest period of economic growth in the United States since 1854 (!). But there was no particular joy among analysts and investors. The aggregate GDP growth for this period has not even grown by half from the growth that was recorded in the period 1991-2001. And investors' fears that growth will stop increasing with each passing day. China, Mexico, the EU and might be Japan. The economic data is a growing concern so far, recall the statistics from ADP or the data on the Manufacturing Purchasing Managers Index from Markit, that in ay dropped to the lowest values since September 2009. As a result, analysts JPMorgan Chase & Co. increased the likelihood of a recession in the United States from 25% to 40% in the second half of 2019. There are no major events like NFP or announcements of the results of the leading Central Banks, but there will be plenty of statistics on China (trade balance, inflation, industrial production and retail sales), Great Britain (GDP, trade balance, labor market and industrial production) and the USA (inflation, industrial production and retail sales). As for our trading preferences, they have not changed over the week. And what's the point of changing positions that make a profit? Almost all of our recommendations for last week turned out to be a good plus. So, we will continue to look for points for the sales of the US dollar primarily against the Japanese yen, as well as the euro and the British pound, sales of oil and the Russian ruble, as well as buying of gold.
TVC:DXYShort
by Trade24Fx
Preparing for the NFP, ECB results & FedMonetary policy decisions. The announcement of the ECB’s decision on the parameters of monetary policy in the euro area was the main event. As expected, no changes followed. The most important thing, as usual, was concentrated in the comments of the Head of the ECB, Mario Draghi. The economic growth forecasts worsened again (the GDP growth rate for 2020 was lowered from 1.6% to 1.4%). In addition, according to Draghi, the ECB is serious about a return to quantitative easing and lower rates. Buying euros after such a speech of the head of the ECB is not worth it, even if you really want to sell a dollar. And today we want to sell the dollar more than ever. In yesterday's review, we have already noted that the figures for the number of jobs in private US companies in May were just awful. + 27K - we have not seen such figures since the global financial crisis. After publishing NFP a couple of times over the past few years, frankly, weak numbers, from time to time, have been shown. But not in the case of data from ADP. It is difficult to imagine a situation in which the data from ADP showed + 27K with the forecast of 180K, and the figures for the NFP come out near + 185K. The level of correlation between these indicators is low, and the methodology for calculating indicators differs, but at the same time, they characterize the same market in the same coordinate system. So today we are waiting for the NFP to lower its forecast. By lower we mean marks + 100K and below. The figure in the range of 30-50K will not surprise us much. But the markets definitely will, provoking massive dollar sales on the entire spectrum of the foreign exchange market. We recommend not waiting for the official figures to be realized, but selling the dollar, since it might be too late. Let us explain why exactly today the weak NFP data is so critical for the dollar. The fact is that the markets are increasingly being discounted for the rate decrease by the Fed in 2019. In particular, the probability that the rate by the end of 2019 will be unchanged is less than 2%. Accordingly, with a 98% probability, it can be argued that the rate in 2019 will be lowered. There is almost a 90% chance that the rate will be reduced twice. At the same time, more than 50% of traders believe that the rate will be reduced 3 times. Plus there is another 17% chance that the rate will be reduced 4 times (!). Note that the probability of this event did not exceed 4% last week. That is, the probability increased by more than 4 times (!).in less than a week. Weak NFP Data will provoke a slowdown and problems in the US economy, but also the Fed will lower rates aggressively. Perhaps at the next meeting in mid-June. Perhaps not by 0.25%, but by 0.5%. Our positions today without any changes: we will continue to look for points for sales of the US dollar, sales of oil and the Russian ruble, as well as buying of gold and the Japanese yen.
TVC:DXYShort
by Trade24Fx
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