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News background and trading ideas for 06/12/2018Unlike the rapid Tuesday, on Wednesday wasn’t no volatile pound's bursts neither a rampant gold growth, although we couldn't avoid another wave of sales in the US stock market. It was related partially with the close US financial markets due to mourning for George H.W. Bush. Besides, China has somewhat defused tensions, which hastened to assure panicked investors that agreements with the United States are taking place and that China is going to carry out them as soon as possible. Although according to the reaction of the US stock market, obviously, not everyone believed. The most relevant event of yesterday excluding the Chinese announcement was the reading out of outcomes of the Bank of Canada meeting. The rate remains unchanged. But, in general, the announcement had a “dovish” impact on the markets. It was related to concerns of the BoC about the much slower growth of the country’s economy. Accordingly, the chances for the rate hike sharply decreased. All these had a significant influence on the Canadian dollar, which has dropped to the minimum points since last half a year. Nevertheless, we recommend purchases of the USDCAD pair. Despite the sharp cut in oil production in Canada, the conclusion of the USMCA last weekend as well as the termination of the trade wars between the USA and China - it’s great signals for currencies in general and for the Canadian dollar in particular. We continue to recommend buying the pound either. The government of Great Britain as much as possible was trying to low the grievance of the Parliament. It has, in turn, contributed to the strengthening of the pound. But recall one more time, the real growth of the pair will not be earlier the vote in the Parliament. In the oil market, without much changes, since everyone was waiting for the OPEC meeting and its results. We continue to hold oil positions at a pause, awaiting news from Vienna. According to the results of the technical committee meeting, it is clear that nothing is clear. That is, it seems they want to reduce, but they cannot say for how much. In general, Iran stated in plain language that it is not going to cut anything. Recall Qatar leaves OPEC in January. In general, it is not a fact that OPEC will be able to reverse the situation on the oil market. We are watching. From macroeconomic statistics, it is worth noting today the publication of data on employment in the US from ADP. These data are traditionally published on the eve of the release of official statistics from the Ministry of Labor, which will be announced on Friday. But we'll talk about it tomorrow. Today, the list of our other trading recommendations is as follows: we buy gold intraday and mid-term, sell the Russian ruble on all investment horizons, ranging from intraday to mid-term and long-term. Finally, we continue to lean toward dollar sales in the foreign exchange market in general.
Short
by Trade24Fx
News background and trading ideas for 04/12/2018Yesterday the financial markets were consumed by outcomes of the G20 summit, precisely the arrangements between the USA and China. We were describing it substance in yesterday review so today we will try to analyze a long-term influence of this landmark deal on the main assets. In order to understand which of the assets will grow on this news and, accordingly, what to buy, you need to remember which of it fell during the peak phases of trade wars. Stock markets and currencies of developing countries - this time. Commodity markets, including oil and gold, it’s two. Canadian and Australian dollars, it’s three. So, a list of candidates to purchase this week (during this period, supposedly, must be maximum event consolidation) are more or less clear: buying Canadian and Australian dollar, looking for points for gold purchases. Currencies of developing countries can also be made an object of interest, as well as their stock markets. That will probably be a lot of pressure for the US dollar this week. So we continue to recommend it sales, considering that it is an inseparable component of almost every liquid currency pair. Returning to the subject of the long-term impact of the arrangements between China and the United States. For America, the positive is primarily in the ability to increase exports to China of agricultural and energy products. Accordingly, precisely these components of the economies will be the main beneficiaries. But the country's economy as a whole will also profit since we can well expect a reduction in the US trade deficit, which in itself is a big positive. As for China, it has all chances to restore the credibility of economic growth. Which, in turn, should influence in a positive way on the commodity market as well as emerging economies (it have mostly commodity structure and depend on prices in commodity markets). Chinese economic growth will lead to the demand growth on oil and could to push up quotes of “black” gold. By the way about the oil. We continue to adhere to short-term purchases while maintaining mid- and long-term sales. The oil has all chances to increase this week, so it will be without any sense to pass such opportunity. Besides, the informational background on the customer's side: Canada has sharply decreased oil production, while Russia and Saudi Arabia promised to come to cut in oil production. So we are looking for points for sales of oil. It was uneasy yesterday in pound’s pairs. Other rides stem from uncertainty and tension due to the vote in Parliament. We continue to consider current prices of the pound as a gift and recommend it purchases. Despite the fact that the Russian ruble relates to currencies of developing countries, we continue to recommend it sales even in the light of positive outcomes of G20 for emerging countries.
Long
by Trade24Fx
News background and trading ideas for 03/12/2018The last couple of weeks although were considerably volatile for the financial markets, by and large, little has been essentially changed in the fundamental background. As a result, last week the markets at all focused on fortune-telling on the coffee grounds, trying to predict the future of the Fed's monetary policy, based on the words of Fed Chairman Jerome Powell, or from the contents of the minutes of the last FOMC meeting. The forthcoming week promises to be more than busy, but super intense. Here is just a short list of upcoming major events of the week: statistics on the US labor market (and in particular NFP data), decision on the interest rate of the Central Banks of Canada and Australia, voting in the British Parliament regarding Brexit (approval of the agreement between the UK and the EU), OPEC meeting, Eurozone GDP and much more. The week has been already marked by a milestone before it even began. Donald Trump and Xi Jinping on G20 meeting have agreed to suspend the trade war between the US and China and no longer increase import tariffs. Since there is an agreement on this the additional duties on Chinese goods imported into the United States will be frozen at 10% for 90 days. In exchange, the Celestial Empire undertakes to "immediately" reducing of the trade imbalance between the two countries and import from the United States a "serious" amount of agricultural, industrial and other goods, as well as energy. Volatility explosions are almost unavoidable considering the abundance of significant events in the week so for nervous traders and lovers of increased risks, this week would better to take a break and watch what happens. But on the other hand, these are such weeks that provide excellent trading opportunities. In the course of the week, we will, whenever possible, give assessments of one or another event and analyze the options for the reaction of markets. Let’s remind our core trading positions so far, with which we start the new week either. The best agreement of autumn has not yet become one, but it has a chance to rehabilitate itself and become the best treaty of winter. Or rather December, since everything is supposed to end if not this week, then next. It's about the pound purchases. We have been handling this deal for several months and finally came close to a resolution. We cited it motivation more than once or twice. We only recall that, according to our estimates, the removal of uncertainty around Brexit (in a positive way) can lead to an increase in the pound against the dollar in the area of 1.41-1.43. It seems to us the dollar is on a top now, despite the confident Friday’s closure, which means it needs to be sold. Accordingly, we continue to recommend sales of USDJPY and USDCAD pairs, as well as purchases of EURUSD and GBPUSD. Intraday purchases of the gold are keeping to remain relevant despite that the trading hatchet is buried. As for oil sales, we strategically continue to stick to this position, but tactically, in the light of the results of the US-China meeting, as well as the upcoming OPEC meeting, we would recommend temporarily fix profits in sales and wait for the outcome of the OPEC meeting. About a year ago, such a meeting ended with a rise in oil prices by almost 2 times. Sales of the Russian ruble look more predictable in this term. It owes the oil about 20-30% of the cost (it is understood as the temporary unwillingness of the ruble to work out the oil fall).
Long
by Trade24Fx
1
News background and trading ideas for 30/11/2018Last Friday of the month could be difficult in terms of price dynamics in financial markets. For instance, may start fixing gains in short positions in oil. There is a formal reason for this - Russia has partially reduced its oil production in November and announced and expressed their willingness to substantive negotiations to cut oil production. Thus, the Russian Federation is trying to set the stage before meeting with a crown prince of Saudi Arabia Mohammad Bin Salman Al Saud on G20 summit in Argentina this weekend. This meeting, in turn, should be the basis for the OPEC summit next week. Considering that the correction in oil is already long overdue, and also the fact that market sentiment seems to be close to changes, we recommend temporarily to withdraw from short positions in oil (taking profits) and wait for the results of the OPEC meeting. Total, today, oil may grow and increase sharply. As for other markets, there is something to fix in pairs with the dollar. Considering that the statements made by Fed Chairman Powell yesterday were finally interpreted by the markets as dovish, the dollar may well be a victim of sales. The Fed Minute, published yesterday, showed that at the last FOMC meeting on November 8, an adjustment to the phrase “further gradual” rate hike was discussed, which only confirmed the markets that the Fed’s monetary policy was close to the end of the tightening phase. So, there is a formal reason for selling the dollar, and technically the points for starting are almost perfect. So we continue to recommend dollar sales on all main fronts: USDJPY and USDCAD sales, as well as purchases of EURUSD and GBPUSD. From the relevant macroeconomic statistics today it is worth noting data on consumer inflation in the Eurozone. The ECB has long been waiting for actions to tighten monetary policy, and of inflation rises, these expectations will increase and provoke an increase in demand for the euro, primarily against the overbought dollar. Turning to our other recommendations, it remains unchanged - midterm sales of the Russian ruble, as well as looking for points for intraday purchases of the gold.
Long
by Trade24Fx
News background and trading ideas for 29/11/2018Yesterday, in the financial markets (apart from the cryptocurrency market), until the speech of the Fed Chairman Jerome Powell was considerably quiet. In many ways, this was due to the absence of surprises in the information field. By and large, the current positional struggle continued. Data on US GDP for the third quarter (revised) came out exactly with the expectations of analysts and amounted to 3.5%. In general, this indicator is excellent, but it has been included in the price of the dollar long ago, so no one hastened to buy it. The major event for the dollar yesterday was the speech of the Fed Chairman Jerome Powell. We’ve noted many times already, that the markets are interested a lot of future Fed’s actions now. The thing is that the cycle of rate hikes is certainly coming to an end and everybody is interesting how much of these increases are still. Actually, the less of raises, in theory, then worse for the dollar. Powell noted that the rates are already very close to the neutral level. That, in fact, confirms that the Fed has achieved the desired point. Considering the exceedance of the neutral level of the rate should be proved, and if the US economy begins giving hints of a slowdown, it's undoubtedly that the Fed will go over the neutral level of rates. Generally, the attitude against the dollar in the foreseeable future, in our opinion, may change. The reason is that the impetus that Trump gave to the US economy, including fiscal easing, may well fade away and the US economy will return to growth rates of around 2%. Of course, for now, these are only concerns, but they are already beginning to put pressure on the dollar. Analysts at JPMorgan Asset Management recently released a report saying that the dollar exchange rate is expected to decline in the future in 2019, and this trend can last for years. Recall, we are generally inclined to think that the dollar is at the top now. In this regard, we recommend its neat (after all, transactions against the current trend) sales . Accordingly, our recommendations for working in the foreign exchange market this week: sales of USDJPY and USDCAD, as well as purchases of EURUSD and GBPUSD. The last pair in this list has its own history instead. The drama with Brexit is close to completion. There is less and less time until the vote in Parliament. Bloomberg on this occasion conducted a survey of experts on the outcome of the vote. 55% of respondents believe that parliamentarians will not approve the current agreement. In our opinion, even if the first vote crashes, this will not be the end of the story. And on the second or third overvote, the fancied result will be accomplished. Basis - the price of the issue is too high. Failure of a vote is an exit without an agreement. But it is profitless for Great Britain itself and very unprofitable for the irrational principle to take over the rational one. In this light, yesterday’s statements by the head of the Bank of England Mark Carney are very revealing. He said that exit without a deal would cause vast destruction to the UK economy. In particular, the country, in this case, expects the toughest economic recession since the Second World War. Yesterday the Russian ruble predictably fell. But this was not the limit of his fall. So we continue to look for points for its sales. This is perhaps the surest deal in the foreign exchange market today. Regarding the oil market, here, the growth of the US oil inventories has killed just grown optimism of oil buyers. Our position is unchanged - midterm sales of the oil. Gold yesterday has perfectly worked out our forecast. Considering that it purchases look well balanced to the risks, we continue looking for points for gold intraday purchases.
Long
by Trade24Fx
News background and trading ideas for 28/11/2018Yesterday the dollar in the foreign exchange market continued to gain. What was the occasion for that? It is hard to name a particular reason for that. First of all, other expectations that the US and China will agree finally and trading wars will be ended have caused such reaction. However, we will get some clarity unless as an outcome of the meeting of G20, which will take place at the end of the current week (it will be a dinner meeting on Saturday between Trump and Xi Jinping). We can also connect the upsurge in interest with comments of Fed officials, who continue to emphasize that rate hike will continue with a projected rate in 2019 either. However, its further growth remains in question. Technically, the dollar went to very relevant levels in pairs with the euro and the pound, as well as with the Japanese yen. So, despite the fact that this recommendation is distant from current market trends, we nevertheless recommend buying EURUSD pairs, as well as GBPUSD. Besides, you can sell USDJPY and USDCAD but do it very carefully . This should be done without much bigotry and with small stops, but it seems to us that the dollar reversal is just around the corner and in order to catch it, we have to be ahead. At the same time do not forget about today's data on US GDP. If it turns out to be above 3.5%, the dollar may receive another upward momentum. Otherwise, it is actually the GDP figures can be the reason for the start of dollar sales. In the Brexit front, there is not sentiment against the pound purchases. Trump added fuel to the fire, who said that the agreement with the EU does not automatically mean a trade agreement with the United States. And he did hint that Great Britain could well be the new target of the US trade war against peace. But the key event is not Trump's tweets, but a vote in Parliament. According to the current information it should take place on December 11. So, right up to this day, you should not count on a robust increase in the pound. Nevertheless, it purchases are still relevant, simply because, in pair with the dollar, it has approached the most significant level of support. And last but not least, we recall that part of the pound positions can be used for the purpose of intraday profit. A situation with new sanctions against Russia remains in the air so far, but as we have noted earlier, it is inevitable. This is nothing but a scope question. So we continue looking for points for sales of the Russian ruble. We also remind that the drop in oil by 30% has not been worked out by ruble yet. So it's just a matter of time when it starts to decrease.
Long
by Trade24Fx
News background and trading ideas for 26/11/2018Last week has been poor on the relevant macroeconomic statistics, or some significant events nevertheless it has handed a few surprises. First of all, these are sell-offs in the cryptocurrency market, as well as another oil’s fall on 10%+ (by the way (!) this is the seventh week in the row when the oil ended in the red). The essential event of the weekend was the summit between EU and Great Britain. Well, leaders of 27 countries, which will remain in EU after the exit of Great Britain, have approved a draft agreement which provides conditions of Brexit. So it can formally declare that the negotiations have ended successfully and now for the UK comes the final step - to push the current version of the treaty in the Parliament. The Parliament is run out of time for consideration and voting (experts name the December 20 as the deadline, but really a vote should take place at the start of December). So a denouement is just around the corner. Recall, we recommend purchases of the pound. According to our estimates, paired with the dollar, its level of undervaluation exceeds 1000 points. The last day of the week has been quite saturated in terms of outgoing data. However, the Europeans didn’t seem very excited: the German GDP data was very vulnerable, as were the indicators of business activity. And since Germany is the core of the Eurozone economy, there is nothing surprising in the fact that the Eurozone Business Indices are also worse than expected. It is entirely appropriate that the euro was under pressure and suffered losses. Our attitude to the euro is still unchanged - we are looking for points for sales of the single European currency. The reaction of the Canadian dollar to rather good statistics on Canada turned out to be somewhat strange (consumer inflation and retail sales were higher than expected). The growth of the USDCAD pair can only be explained by the general strengthening of the dollar in the foreign exchange market. Recall, we recommended selling USDCAD and still see no reason to reject this idea. Quite opposite, current prices, especially after great statistics on Canada, seem to us as a great opportunity for more expensive sales. In any case, we note that the stops should be placed above 1.3330, but the profits can be set around the 1.30 or even lower. But it depends, of course, on the planned time being in a position. Sell-off of the oil on Friday was related to another part of the rumors that Saudi Arabia has produced a record quantity of oil in November. Regarding that, all market’s eyes now are on supply in the oil market, the news turned out into the hands of sellers. Let’s remind, we’ve recommended to sale the oil already for a couple of months , and continue looking for the points for asset’s sales, both as for intraday sales as well as for mid-term sales. We see the potential for a decline of up to $40 for a barrel (WTI crude). Other our trading ideas are unchanged: mid-term sales of the Russian ruble as well as an intraday purchases of the gold.
Long
by Trade24Fx
News background and trading ideas for 23/11/2018Yesterday was a day off in the USA, so it was pretty quiet in most pairs, but not in all. The British pound, as usual, was the central troublemaker. Literally, in half an hour, it managed to climb by almost 150 points. The reason, unquestionably, was the same one - news from Brexit fields. Unless recently news had negative connotations (from the markets point of view), than yesterday information that the UK and the European Union will ensure free trade after Brexit and are determined to resolve an issue with Ireland border, as well as the news that the European Commission approved a political declaration on new relations between the EU and the UK, provoked a sharp increase in optimism about the outcome of Brexit. We recommend buying the pound for months, and in the light of such news just established in our position. Recall that in the current increased uncertainty, we use the following trading strategy: keep half of the volume of purchases in the form of a medium-term position with targets up to 1.41-1.43, but to use part of the position to catch volatility bursts like the one we saw yesterday. That is, to buy a pound from intraday lows with the closing of the position upon reaching 100-150 points of profit. And to do so on an ongoing basis, until there is an ultimate certainty with Brexit. Another forward-looking trading idea, particularly interesting today is the sale of the pair USDCAD. The fact is that today a very substantial block of statistics on Canada will be published, which includes statistics on consumer inflation, as well as retail sales in the country. Considering that the pair could not storm the upper limit of the medium-term range (1.33) and has already started a downward movement, the obvious goal of which is the lower limit of the range (1.28) today's data may well give the necessary impetus and finally dispel traders' doubts about the direction of movement in a pair. So, we recommend selling a pair USDCAD with targets around 1.30 (conservative) or 1.28 (optimistic scenario). Set stops above 1.3330. In the case of the increase of the pair and not failure data, you can add about 1.33 to sales. Another motivation for selling the pair is the potential difficulties of the dollar due to the aggravation of the situation with migrants and the promulgation of Trump's order to close the border between the US and Mexico and allowing the military to open fire on illegal immigrants. Other our trading ideas are unchanged: mid-term sales of oil and the Russian ruble, as well as intraday gold purchases.
Short
by Trade24Fx
News background and trading ideas for 22/11/2018Today is a Thanksgiving day in the USA (the day off), so it’s quite likely American session will be exclusively calm today. Anyway, we shouldn’t relax completely. A “thin” market pose inherent dangers of strong and unexpected moves. However, there are no threats on the horizon. Generally, as we’ve already noted at the beginning of the week, there is no much interesting in the fundamental background so far. Yesterday was quite as well in the technical level. It seems markets have decided to take some rest. What is remembered day yesterday? Probably, perhaps, the Bloomberg report that Saudi Arabia in November 2018 increased its production to a record level of 10.9 million barrels per day deserves our attention. So oil sales on Tuesday are becoming clearer. As we see, key producers are not in a hurry to keep the promises and agreements voiced in life as a result of the last OPEC+ meeting in Abu Dhabi. This development entirely suits us, as it corresponds to our medium-term recommendation on oil sales. While there are no producers breaking production records, oil’s chances of growth are few. Talking about the essential oil producers. The United States is launching three new pipeline branches next year, which will circumvent the current infrastructure constraints and potentially provide an opportunity to increase US oil production by 2 million b/d in 2019 (while the profitability of most wells is around $30 per barrel, and this is a benchmark for the potential horizon of falling oil prices). In addition, oil reserves (according to official data) in the United States increased again, and have grown quite significantly (by almost 5 million barrels, with the forecast of 3.45 million). So we continue to look for points for the asset’s sales. And, of course, do not forget about the Russian ruble, which is still entirely dependent on oil at the fundamental level even despite that it has sharply reduced the level of correlation with oil in 2018. Somewhere in Europe, meanwhile, the struggle between EU and Italy continues. Periods of optimism due to the rumors of compromise between the parties are replaced by moments of disappointment. In general, so far we tend to sell the euro, especially against the dollar. But amid increased euro dependence on news from the EU, we should be ready for sharp and unpredictable spikes in volatility. Gold continues to justify our hopes and recommendations for looking points for it intraday purchases. Well, continue to adhere to this strategy. Our core trading idea is the purchases of the British pound which is looking for news from the Brexit front so far. Since it should not be expected until the next week, we are just observing what is happening. Well, if possible, looking for points for pound’s purchases.
TVC:USOILShort
by Trade24Fx
News background and trading ideas for 21/11/2018Yesterday in the foreign exchange market the wind has changed once again (the dollar in power again), issues in the cryptocurrency market as well as in the stock market continue to take place. Tellingly, all this was going on without explicit informal injections. Generally, the picture turns out to be sad both for cryptocurrency buyers and for the bulls in the US stock market as well. Bitcoin has already lost around 80% of its worth and apparently, its intends to waste more. And the US stock market has officially passed to the bearish territory after the loss of 20% from maximums. So we need to think once again about the needless to swim against the current in these markets. Actually, Goldman Sachs has already had words and recommended actively get out in the cache in order to wait out an inauspicious period. However, we need to swim from time to time against the tide. We mean our long-term position on the British pound. Chairman of the Bank of England Mark Carney yesterday has openly stated that the high volatility in pounds pairs will remain up to the end of the negotiations between the UK and EU. Besides, he emphasized once again that the exit without the deal is fraught with a chaos. Which means, actually, he has played along Theresa May in her attempt to push the required vote in Parliament. Our trading idea has been adopted by UBS Group, which analytics consider current prices are attractive for the pound’s purchases and the implementation of the scenario of “harsh Brexit” would hardly send the currency much lower. From the general informational background, Italy and its tensions with the EU stand out as usual. Recall the Italian budget deficit exceeding the permissible limit, as reported by the country in the EU. But the depressing thing for the euro is that the Italian authorities confirmed the main parameters of the country's state budget, including the growth rate of GDP and the size of the budget deficit, despite the fact that they were previously rejected by the European Commission. In essence, this is a deliberate escalation of the conflict. Amid such sabotage, talks about another split in the EU and even Italexit have immediately arisen. Such news, of course, put pressure on the euro. So yesterday's drop in the single European currency is quite natural. Meantime, the dollar yesterday felt in the foreign exchange market very well. Talking about the Fed and easing of monetary policy taken a back seat so far. Beyond that, the basic arsenal of our positions is unchanged: mid-term oil sales (tellingly, yesterday's data from API, which have shown a reduction in US oil reserves for the first time in the last 8 weeks, were completely ignored by the market, which indicates its narrow focus both in action and in the perception of information) and the Russian ruble. Intraday purchases of gold (from hourly support levels), as well as sales of the USDCAD pair in the hope of good macroeconomic statistics for Canada, which is scheduled to be published on Friday.
Long
by Trade24Fx
News background and trading ideas for 20/11/2018Yesterday in the news context was relatively quiet, as evidenced by the lack of strong moves in the foreign exchange market. An interesting informational trend at the start of the week was speeding up the idea that the Fed in 2019 would sharply reduce the degree of aggression and the rate hike would be milder than was previously planned. It’s hard to say of the amount of authenticity, but the impact of such conversations on the dollar yesterday was remarkable. And although we consider this kind of prediction as fortune-telling on the coffee grounds, nevertheless, it is worth waiting for a little with the purchases of the dollar. At least, while speeding up the theme of Fed mitigation is in the active phase. Another potential cause for the dollar’s weakness is the lack of progress in negotiations with China. Amid this Goldman Sachs delivered quite disappointed forecasts for the US dollar for the next six months. For instance, the dollar must fall against the euro to the 1.17, as well as - to 1.38 against the pound. Speaking of the pound. Yesterday, which was foreseeable, hasn’t brought any important news, while the pound was obviously guided by the rule “no news is good news in itself” and tried to grow. Theresa May, meanwhile, is preparing the ground for voting in Parliament, before which there is at least a couple of weeks. In particular, yesterday she met with representatives of big business and convinced them to accept the current version of the deal. We continue to monitor developments around Brexit and recommend the pound ‘s purchases . A motivation for this deal, see our previous reviews. Today the speech of the Governor of the Bank of England Mark Carney may have an impact on the pound. Oil has failed to organize any pressing counterattack and yesterday came close to its current lows. Recall, we recommend oil sales since it cost $ 75 per barrel of the WTI brand and continue to stand by the “sell” recommendation, despite its more than 20% drop. Do not forget to sell the Russian ruble, which has yet to act a robust drop in oil in October. Intraday gold purchases are still relevant. In addition, in light of the potential weakness of the dollar this week, you can try to carefully sell a pair of USDCAD in the hope that Friday statistics for Canada will not fail.
Long
by Trade24Fx
News background and trading ideas for 19/11/2018As traditionally we begin the first review of the new week with an analysis of the last week. All the key events of the past week without any doubts were related to the UK and Brexit. On Thursday, we witnessed the most powerful fall of the British currency amid the news that the British Government was leaving several ministers in connection with the disagreement with the current version of the treaty between the EU and the UK. Markets literally fixated on the pound’s issues, ignoring the obvious positive: the appearance of a “draft” arrangement between the EU and the UK (only a week ago they only dreamed about it), as well as the Government’s approval of this “draft” - that is, from the point of view of formal procedures, Great Britain has passed most of the way of the exit from the EU within one week. Such development of events completely confirms our core idea - markets wrongly assess the probability of conclusion the deal and consequently the vast underestimation of the pound. So we continue to recommend purchases of the pound and perceive the current prices as a gift. Another high-profile event of the past week was the drop in oil, which occurred amid the news about a new cut of production by OPEC+ members (figures about 1 million barrels per day were voiced). A fall amid the fundamental positive is a very bad signal for oil. And although at the end of the week has managed to slow down the fall and even draw a couple of white candles, we consider that the oil should continue to be sold. Moreover, oil reserves in the United States are growing, as well as the number of drilling rigs and, as a result, oil production in the United States. The upcoming week in terms of macroeconomic statistics is quite calm. Unless the important block of statistics on Canada on Friday. But what to do with the Canadian dollar, we will talk on the eve of the data. Otherwise, we continue to observe the situation around Brexit and use pound volatility for active intraday trading. Recall, in addition to the medium-term long positions on the pound, we recommend conducting active trading within the day, buying on descents and closing purchases, when the plus reaches 100-150 points. Do not either forget selling the Russian ruble and keep looking for the points for intraday gold purchases.
Long
by Trade24Fx
News background and trading ideas for 16/11/2018The main event yesterday was, without any doubt, the epic fall of the pound. Namely, the fact of its sharp decline is nothing strange itself. The pound all current week was very volatile. But the scale of its fall reverberated. Less than in 4 hours the pound in pair with the dollar has lost around 300 points. In the light of such developments, we need to remind about our core recommendation - purchases of the pound and isn’t it about time to reconsider it on “sales the pound”. So far our answer is - no, not yet. Quite the contrary entry points became extremely attractive and will be just sinning pass by such possibilities. We’ve already written about the causes of yesterday fall in a separate review. We only note, that there will be more of such panic waves. So for traders with weak nerves and a low threshold of tolerance for losses will be better stay away from this pound’s games for a while. But from the other hand, such transactions - this is the only option to achieve the ideal entry points. Analysts - jack or jack shit had intensified dramatically. This is also a very good signal for us. If the apocalyptic forecasts sound more and more actively (“the pound will drop to 1.1”, “the pound expects a decline of 10%”, etc.), the more likely it will be the growth of the pound soon. We do not need to go far. A month ago, many experts voiced the price of oil at 100 a barrel. And where are they now, and where is oil? The same picture with the last year's Bitcoin analysts for $100,000. Total, we continue to recommend the pound purchases. We also continue to recommend sales of the Russian ruble, look for the points for the oil sales and gold purchases. Besides, intraday sales of the euro against the dollar with small stops also seem to us a good deal. Especially in light of the statements of the Fed chairman that the US economy is in excellent shape, as well as market expectations for the Fed rate hike in December. Regarding the macroeconomic statistics, yesterday’s retail sales data in the UK turned out to be rather weak, but who cares about it now. Today we are waiting for figures on consumer inflation in the Eurozone, however, we are not expecting any surprises and spikes in volatility.
Long
by Trade24Fx
News background and trading ideas for 15/11/2018Yesterday was remembered by another tachycardia of the pound, the fixation of gains on oil, sell-offs of cryptocurrencies as well as inflation statistics for the UK and the US. Let’s start with statistics. A consumer inflation in the USA and the UK came out slightly worse than analytics ‘ forecasts, but not so weak as to concern the markets seriously, so nothing radically changing the current fundamental picture has happened. Eurozone GDP came out within a framework of predictions and still demonstrates extremely weak growth rates. Talking about our core mid-term trading idea - buying the pound, we have to admit that even the draft of the agreement between EU and the UK is already on the table - it is just a beginning of the long journey: the further approval of Cabinet, the UK Parliament, etc., so the resolution will not come about. However, the main thing is - the process is going. The pound will catch up it then. So we continue to recommend purchases of British currency, while our tactics, voiced earlier, seems to work very well. It is about a floating part of the position when we fix a part of the position in the plus of 100-150 points and then reopen it below. Yesterday we pulled off such a maneuver several times, buying a pound against the dollar around 1.29 and taking a gain of about 1.30. The oil market obviously has begun the profit-taking. We continue to observe the developments and look for points to recover medium-term short positions. Recall, on Tuesday OPEC published its monthly report, where were announced rather unpleasant forecasts on the growth rates of oil demand, while the International Energy Agency predicts the US the role of the world hegemon in the oil market by 2025 and notes that over the next six years America will produce almost 75% of world oil volumes. The supply of shale oil by the mid-2020s. expected at 9.2 million barrels per day. The IEA also noted that OPEC is producing too much oil. The latest data on oil reserves in the United States confirm this (increased for the eighth week in a row by 8.8 million barrels). Regarding the cryptocurrency market, analysts link sales with hardcock of Bitcoin Cash, as well as technical issues - the breakdown of the lower boundaries of the ranges. However, what is happening on the cryptocurrency market is for us only of academic interest, since with this bubble we have been more or less clear for quite some time. Meanwhile, in Russia, there is a small round of optimism amid talks that in November the US will not implement new sanctions against the Russian Federation. We do not share this optimism and consider that the ruble is doomed to decline, especially in light of recent developments in the oil market and its general, in our view, prospects. So we continue to recommend sales of the ruble. Gold sharply increased yesterday, fully justified that advances we have been given to it. Since there is some space for further growth, we continue to look for points for the gold purchases.
Long
by Trade24Fx
News background and trading ideas for 14/11/2018Yesterday has proven to be a quite volatile day and was remembered by the emergence of a “draft” treaty between the UK and the EU, another big fall of oil and statistics on the UK labor market. Let’s begin with Great Britain, all the more since the pound this week - is the main provider of volatility in the foreign exchange market. In general, the data came out quite good, particularly the average wage, which excluding bonuses, was much better than forecasts and significantly higher than the previous value (by the way, the maximum salary increase since 2008). Why is this indicator so relevant? The thing is that the Bank of England is now at a crossroads - to raise its interest rate or not in the foreseeable future. Such data is pushing the Central Bank towards the next rate hike. For the pound, this is a completely bullish signal. Actually, its yesterday’s increase in the afternoon is a confirmation of that. Today is equally important for the pound - statistics of the customer inflation of the UK will be released. Do not either forget that the future of the pound is anyway decided in the Brexit front instead of on statistics’ fields. And we’ve got a breaking news from this front - the UK and the EU have concluded a “draft” of a deal. The thing is that the crucial step was finally taken. Recall that our medium-term position is buying of the pound with targets around 1.41-1.43. In this regard, it is quite characteristic that the main players began massively to turn over on a pound towards its purchases. In particular, yesterday was the information on the markets that Merian Global Investors (in the running of the foundation about $45 billion) added to its long positions in the pound in the hope that the UK would reach the divorce settlement with the European Union. The purpose of purchases - 1.40. Aberdeen Standard Investments even expect a rally to 1.50. As we see, the big players join our point of view, which we have been voicing since September. On the oil market, the historical record was fixed yesterday - the oil has been declining 12 days in a row. Efforts by OPEC+ to return the forces to the bulls were suppressed by Trump, who did another tweet intervention and said that oil is still very high. Markets are tending that the United States will “pushed” Saudi Arabia and they will not bind the oil valve. Gold some slowed down a fall yesterday. Recall that the current prices seem to us as a good chance for buying with small stops and significant profits. Sales of the Russian ruble remains as our favorite position.
by Trade24Fx
News background and trading ideas for 13/11/2018Despite the day off in the USA, the dollar continued to feel quite confident. The dollar index looks much convincing, and apparently, as long as it keeps above 97, it's worth considering only options for its purchase. On Monday nothing fateful ever happened, there were no significant macroeconomic statistics, but past week and weekends as well turned out to be very intense, so it was something to work out. It was very volatile yesterday in pound pairs. Actually, the pound provided the opportunity to earn both sellers and buyers. Recall that we recommend both short-term pound purchases on descents for income in 100-150 points, as well as medium-term positions pointed at a positive outcome of the Brexit negotiations. Speaking of negotiations, the week started amid another round of frustrations about the progress of Brexit talks and a new wave of mistrust in their final success. It had a very negative impact on the dynamics of the pound. However, there were positive signals from the EU in the form of a statement by the EU’s main Brexit negotiator, Michelle Barnier, that the British Parliament may review the main elements of the deal on Tuesday. Anyway, the process is going and lack of confidence in his success - an opportunity for profit. Euro has punctured significant support in pair with the dollar, so now it looks really hopeless. Issues with Italy instead of to be resolved had become are compounded. Amid all this, the only reasonable strategy here is selling the euro. Quite symptomatic yesterday ended the day in the oil market. Even we convinced bears, were somewhat surprised by the inability of the bulls to organize a local correction. The strongest oversold amid luxurious fundamental cause (the outcome of the OPEC+ meeting in Abu Dhabi), and at the output instead of confident increase, we see another black candle on the daily chart. Despite the definite confirmation of our basic idea - the sale of oil, we are still concerned about the potential actions of OPEC and continue to recommend “stand aside” and keep an eye on the developments. For those who are afraid to pass by the further downward rally in the oil market, we recommend selling the Russian ruble. The potential of its decrease has significantly accumulated, and the decline in oil will stimulate its implementation. Gold had difficulties yesterday amid increasing dollar, but the points for the gold purchases are still attractive not to risk taking a long position in gold. So continue to look for points for gold purchases with small stops and solid profits.
Long
by Trade24Fx
News background and trading ideas for 12/11/2018Last week ended for the dollar definitely on a positive note. And if the last week began with doubts that involved the concerns about the outcome of the midterm elections in the United States, then after the announcement of their results, fears somewhat decreased. And on Thursday, the Fed once again played up the dollar, so much that the dollar continued the growth on Friday. Amid quite intense past week, the current one promises to be rather calm on the news background. At least, there are no scheduled causes for strong bursts of volatility on the horizon. There will be a lot of UK statistics and data on consumer inflation in the USA and GDP in the Eurozone though, so you will not be bored anyway. Considering the priority trading positions and our current recommendations, the sales-off of the pound on Thursday-Friday and from the beginning of the current week - it’s an excellent reason for its cheaper purchases. In general, the following tactics appears (while the agreement between the EU and the UK continues to hang in the air): part of the pound position should be attributed to the midterm with targets under 1000 points, but part of the position should be varied to buy a pound on such descents, to fix a part of the position in plus on the fact of reaching 150-200 points of profit. Taking into account the abundance of macroeconomic statistics for the UK this week, such tactics may well prove itself. In the meantime, the pound continues to decay. The cause is the same one - Brexit and other issues in the negotiations process. According to The Sunday Times, the European Union rejected a proposal by the British Prime Minister for Brexit. Besides, on Friday, November 9, Joe Johnson - Minister of Transport - resigned. And there is information that four more ministers are going to act like him. So the current sales of the pound more than explainable. The oil market this weekend got a very strong bullish signal and already today it has been running off. We are talking about the outcome of the meeting of OPEC and its allies in Abu Dhabi. Saudi Minister of Energy Khalid al-Falih stated on Sunday after the rally of the OPEC + ministerial committee on monitoring that the country will decrease production by around 500 thousand barrels per day from November to December. Russian Energy Minister Alexander Novak replied that Russia is ready to cut production if such decision is passed through the coalition of producers, including OPEC. Recall, we recommended selling oil when it was still around $75 per barrel (WTI crude oil), but today, taking into account such news, we recommend temporarily fixed open short positions on oil and monitoring how events will develop. We have to admit that, albeit belatedly, the Russian ruble began to regain the fall in oil. Considering that oil has lost about 20% of its value lately, the potential scale of the collapse of the Russian ruble makes its sales one of the most promising deals of the current fall. Gold has fallen into risky zones in terms of its purchases. But in a case today is marked by another black candle, it may be necessary to revise our views on the feasibility of long positions in gold under the prevailing conditions. Nevertheless, purchases from current ones seem very attractive to us so far, at least because the profit/stop ratio is almost perfect.
by Trade24Fx
News background and trading ideas for 09/11/2018The significant event in the financial markets, yesterday was an announcement of the outcome of the FOMC meeting. As expected, the Fed kept rates steady and remain their rhetoric: economy activity is growing, and the rate will continue to increase at the planned pace. In total, the Central Bank once again played along the dollar, what was our expectations. Regarding our position on the dollar, we've decided to occupy a neutral position. The election outcome created a rather strong uncertainty around Trump's ability to carry out further reforms, plus there is a risk of intensifying political scandals. We will monitor the development of the situation, and when there is more clarity, we will determine the priority direction of trade. Meanwhile, you can work with the dollar on ad hoc basis. Meanwhile, somewhere in Europe, the confrontation between EU and Italy continues, what has a damaging influence on the euro. Thus, sales of a single European currency, rather, wouldn't be the worst trading idea for today. With regard to the fundamental background on Friday, the most interesting should take place in pairs with the pound. The thing is, today will be released the data on GDP of UK. In the analysts' forecast, the growth of GDP will be of 0.6% q/q after an increase of 0.4% in the previous quarter. And although ultimately the outcome of negotiations between the UK and the EU will determine the future of the pound, today's data may well influence the short-term dynamics of the British currency. Recall, we continue to maintain the bullish position on the pounds’ pairs since we believe in the successful treaty conclusion. So, if the data comes out not well, you should wait until a wave of sales comes down and buy a pound cheaper. In the oil market, the situation remains relatively unchanged. The downward impulse is somewhat exhausted, but it has completed its mission - the bulls lost confidence in the inevitability of rising oil prices. And obviously, bears confidently took the situation under control. We recommend selling oil for several months now, and so far we see no reason to change our position. As well as we do not plan to change our position on the Russian ruble, we continue to look for points for its sales. The current decline in gold assets can be used for tidy intraday asset purchases. Let’s remind, we buy gold within the day, while it is above 1210.
by Trade24Fx
News background and trading ideas for 08/11/2018Yesterday markets were focused on the results of the US midterm elections, as well as the calculations of possible consequences of its. Recall, the House of Representatives is under Democrats’ control now, while the Senate is still in the Republicans’ hands. And although the current situation became complicated for Trump, things could be worse. Naturally, the dollar was under a pressure. Such results still may put paid to the future of Trump’s tax reform and considerably cut his others overtures like the building of the border wall with Mexico. Nevertheless, do not hurry writing off the dollar. Already today Fed will release its another decision on the parameters of the monetary policy. And there is almost no chance for the rate hike instead (at least, the current probability that the rate will remain unchanged is about 95%), the Fed may well once again to lend a helping hand to the dollar. To do this, they only need to continue to radiate confidence in the future at a press conference following the announcement of the FOMC decision (and there is enough reason for that - inflation is growing, and the economy is in excellent shape, which, in essence, emboldened the Central Bank in terms of further rates increase) and confirm market expectations that the rate will rise in December (the current probability of this event is almost 80%). So while we have to work carefully with a dollar, but, specifically, today the dollar purchases can justify itself. Talking about uncertainty and insecurity of markets, let’s remind about our other current recommendation - looking for points to buying a gold up until its still above 1210. Recently, in the last two weeks, this strategy has completely justified itself. One of the few pairs in which we would not recommend buying a dollar is a pair of GBPUSD. The pound has clearly, gained momentum and this should be used to buy it. Returning to the issue of the possible consequences of the US elections, it cannot but be noted that the probability of enhanced sanctions pressure against Russia has increased. And this, in our opinion, is an excellent cause for sales of the Russian ruble to those who have not done it yet. Do not forget either to sell the oil, although we should be more careful - the rumors about a possible new agreement by OPEC+ on reducing oil production have been drafted on the market. Nevertheless, so far oil reserves in the USA (both according to data from API and official statistics) have increased for the seventh week in a row (almost 8 million barrels based on data from API and almost 6 million barrels due to official data). Oil production in the United States also soared (by 400 b/d) and reached 11.6 million b/d. This means there is a surplus of oil on the market and its sales remain relevant.
TVC:DXY
by Trade24Fx
News background and trading ideas for 07/11/2018All eyes were turned yesterday to the midterm Congressional elections in the USA. It is only natural that the dollar was under pressure. Recall, market’s concerns were due to the likely victory of Democrats and their takeover of both Houses of Congress. In this case, the basic scenario was the following one: The House of Representatives goes to the Democrats while The Senate remains under Republicans. According to the current results, the basic scenario takes place so far: the Senate is under Republicans meanwhile the House of Representatives goes to Democrats. That is no Armageddon is off. Indeed, the dollar will feel uncomfortable for a while, but we don’t see any causes for its selloff. Moreover, it’s worth remembering the announcement of the FOMC meeting outcome on Thursday. Recall, precisely the tightening of Fed monetary policy was one of the triggers of the dollar’s growth recently. From macroeconomic statistics on Tuesday, it’s worth noting another portion of weak data from the Eurozone. The PMI Composite Business Activity Index fell to its lowest level in the last two years (53.1). And this index for Italy generally fell below 50, which means a decline in business activity in the country. The situation with the Brexit meanwhile is slowly but confident going to its end. Theresa May recently has said that will do her best for the deal conclusion in this month. It is another confirmation of our core trading idea - the pound’s purchases amid estimates outcome of negotiations between EU and Great Britain by markets. The oil market meanwhile has ignored the US sanctions against Iran. It was due to the entering of rivals to the vacant place (Saudi Arabia, Russia, Iraq likely used this situation), as well as the fact that the USA has allowed to 8 countries to import Iranian oil, what’s, in fact, reduced the effect of sanctions for the oil market. Let’s remind, our trading idea - is sales of oil. Do not either forget selling the Russian ruble.
TVC:DXY
by Trade24Fx
News background and trading ideas for 06/11/2018Yesterday passed without special surprises. Generally, there is nothing strange, the key events will take place today (particularly tomorrow) - referring to midterm Congressional elections in the USA, and consequently the announcement of its results (supposedly, the outcome will be known on early Wednesday). More precisely read about the results and possible response of the dollar on it in our separate review. It’s worth reminding about Thursday and the outcome of the FOMC meeting. So, markets have something to focus on and perceive other developments as a kind of “white” noise. Nevertheless, you need to keep yourself up to date with events, as well as understand where information winds are blowing. This morning, the Reserve Bank of Australia left the parameters of monetary policy unchanged while welcoming the current path and its outcome. The Australian dollar did not react to this news in fact - it was fully taken into account in its price. One of the informational winds has definitely been changing its direction recently and blowing ever more strongly into the pond back, pushing it upwards. We find more and more evidence that markets are beginning to believe in a deal between Britain and the EU. Particularly, analysts at Nordea Bank AB recently said that the pound could strengthen by 5% if the treaty goes through, and Mizuho Bank predicts a pound rise to 1.35 within two days after the deal is announced. Recall that we are even more optimistic in our forecasts and see a pound exchange rate above 1.40. Well, the media is increasingly forcing the issue of success in negotiations. Initially, the Times reported that British banks might be allowed to remain on European markets, and then Sunday Times reported that British Prime Minister Theresa May bargained from Brussels to leave Britain as part of a customs union with the EU. Regarding other trading ideas for today, we continue to recommend sales of oil and the Russian ruble. Considering that the chances for the Democrats to win and taking control over the House of Representatives are quite high. The probability of a new sanctions package against Russia is increasing, and this is against the background of falling oil, almost a verdict to the Russian ruble. As for oil, the waivers of the United States to buy Iranian oil by eight countries largely reduces the effect of these sanctions for the oil market, which, amid of maximum oil production from Russia, the United States, and Saudi Arabia, clearly argues in favor of a further decline in oil prices. Since it is not entirely clear with the outcome of elections in the USA, bursts of volatility in gold are viable, so caution should be exercised. Let’s remind that we still prefer the asset purchases.
Long
by Trade24Fx
News background and trading ideas for 05/11/2018Let’s begin our first-week review with an analysis of highlight events of the last week. From the point of view of macroeconomic statistics, the main development was the publication of statistics on the US labor market (unemployment at the 48-year low and wage growth at the 9-year high). As we predicted, the data came out much better than forecasts (although we cannot but note that the predicted figure of +250K for NFP, we have announced earlier, completely matched with the actual one). Consequently, the dollar has ended a week on the up note. Moreover, the past week was finishing with a surge of optimism due to the possible agreement between the USA and China and rumors about the end of trade wars. We can’t relax, however, at least because there are mid-term elections to the US Parliament this week and surprises are more than likely. Another relevant point of last week was a quite strong turnaround in the investor’s sentiment against the pound. One the growth of the pair GBPUSD on Thursday by almost 250 points is worth our attention. The cause is rather the replacement of the information vector, regarding the result of talks between EU and Great Britain than the outcomes of the Bank of England meeting. Markets again began to believe that there would be a deal. Actually, we have been talking about this for more than a month and recommend buying a pound on all fronts. Recall, that the potential growth of a pair of GBPUSD, extends to the area of 1.41-1.43, that is, it’s not too late to buy a pair and earn on it. Considering that they can announce a deal at any time literally, you shouldn’t wait with purchases. Particularly, a meeting of the Cabinet of Ministers is to take place on Tuesday, and so far there is no agenda for it, so perhaps tomorrow the pound will show another 300 points growth. You can earn not only on purchases of the pound but also on sales of oil, as well as the Russian ruble. Particularly interesting in the near future are precisely the sales of the ruble. Let’s remind, that the "deadly" package of sanctions from the United States against Russia can be passed as soon as possible. Moreover, the ruble has not yet worked a 15% drop in oil. That is, there are plenty of reasons for its sales. Another significant event of the current week will be the announcement of the Fed’s decision on the US monetary policy path. Note that it will take place not on Wednesday, as usual, but on Thursday (due to the elections). The rate most likely will not increase, so the comments of the Central Bank will be on the highlight. But we'll talk about this closer to the publication date.
Long
by Trade24Fx
News background and trading ideas for 02/11/2018Yesterday's dollar selloffs have more political implication than an economic one. The fact is that mid-term elections to Congress will already take place on November 6th. Since the probability of forming a polar parliament is high, the dollar was under pressure. The issue of a “split” parliament is that this will drastically reduce the chances for the implementation of new economic incentives from the Trump administration. Particularly, his latest idea is to reduce tax pressure on medium-sized companies. Nevertheless, already today clouds over the American currency can be replaced by the sun, thrown by the NFP. See our separate review to get more details about our expectations about today's labor market statistics. Yesterday's highlight event without any doubt was the meeting of the Bank of England. And although it did not bring any special surprises, the pound continued a steady growth. This was related both to statements by the head of the Bank of England Mark Karni (who noted that if necessary the Central Bank is ready for monetary policy tightening, and as for Brexit, the core scenario of the Bank of England is to conclude an agreement), and with a gradual change in expectations of markets for the outcome of negotiations between the EU and the UK. Markets increasingly believe that the deal will be done. Particularly, yesterday in The Time has published an article, announcing that the parties had reached a preliminary agreement on all aspects of the future partnership in the service sector, which would allow London to avoid severe shocks in the banking sector. So we continue to buy a pound. Gold, either, was growing yesterday justifying and practicing the advances that we gave it in our reviews. Recall, after the breakdown of 1210, we recommend buying gold. Do not also forget about the sails of oil. Especially in the light of last statements by the USA that they are ready to turn a blind eye to the supply of Iranian oil to a number of countries. Such announcement largely reduce the effect of sanctions for the oil market. Therefore, it has an extremely negative impact on oil price quotes. Given that oil prices have already dropped by more than 15% over the past month, we consider that the Russian ruble has accumulated significant potential for the decline and just waiting for a reason to start falling. The most obvious reason is the new sanctions from the US, but even if they do not follow, sales of the Russian ruble with such oil seem inevitable. So we remind our readers of another very promising idea, in our opinion, is the mid-term sales of the Russian ruble.
Long
by Trade24Fx