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Morgan Stanley warns, Powell & inflation under scrutinyThe current week is full of informational events around the oil market. Which continues to play into the hands of sellers. Yesterday, for example, Morgan Stanley analysts warned that if OPEC + participants at their next meeting on December 5 do not announce a higher reduction in production (current volumes of 1.2 million barrels), then Brent quotes will drop to $ 45 (now the price is around 62). That is, the scale of the fall will be about 25-30%. The chances of a new agreement are small, since countries that are not members of OPEC + are increasing production, so it’s not worth counting on the fact that Cartel members will aloud another loses. Accordingly, the downward pressure on oil quotes in December may increase sharply. Recall that this week we revised our intraday asset position and again recommend oil sales. And a few words about the oil market, but in the context of our recommendation to sell the ruble. According to Saudi Aramco, the cost of producing a barrel of oil in Russia exceeds $ 40, two times more compared with Saudi Arabia, and in general, is one of the highest rates in the world (even higher than in the UK and the USA). That is, Russia is one of the most vulnerable countries in the world for falling oil prices. That is why we recommend the sale of the Russian ruble. Meanwhile, ZEW data for the Eurozone as a whole and Germany, in particular, show that economic expectations are still pessimistic, so yesterday's downward pressure on the euro is understandable. The pound reacted quite positively to the statistics on the labour market in the UK, but yesterday there were no strong movements in pound pairs. We continue to wait for news from the Brexit, but for now, there is none - we work with the pound without obvious preferences on the intraday basis - you can buy or sell it, also use the oversold/overbought time zones as guidelines. Today, the reason for the pound volatility jump may be inflation statistics. Given that at the last meeting of the Bank of England Monetary Policy Committee, two members spoke out in favour of lowering the rate, weak inflation data could well trigger a pound decline. We recommend using this for cheaper purchases. Also, data on consumer inflation will be published in the United States. It will be interesting in the context of the fact that in the evening Fed Chairman Jerome Powell will speak to the Congress. The markets are now very concerned about what the Fed is going to do next. The current consensus is a pause in the Fed's actions. But any Powell's allusions to the possibility of an early rate cut will almost certainly provoke a dollar sale in the foreign exchange market.
FX:USOILShort
by Trade24Fx
Bad for oil and good for poundYesterday marked of news regarding the oil market and its prospects. Moreover, this news has a one-sided impact in terms of the impact on oil quotes. On the supply side, we have a message about the discovery of a huge oil field in Iran. It is about 50 billion barrels. To understand if it is a lot, let’s have a look at the statistics. Proved oil reserves in Iran rank fourth largest in the world (150 billion barrels). Accordingly, 50 billion = 30% will be added to existing stocks. That is a lot. It should be noted that while Iran is under sanctions, that is an accumulated potential than a real injection of additional supply on the market. But from the perspective of a market development strategy, the signal is undoubtedly bearish. Especially when you consider the news that Global oil demand may peak within the next 20 years, according to an assessment included in the prospectus for Saudi Aramco's initial public offering and, and further it will only decline. This news does not solve much in terms of supply/demand. But the prospects look extremely alarming for oil buyers. Sum up, in the short term, this news does not have that much impact. But in the long term, the oil market looks increasingly vulnerable. Knowing the markets and their general timidity, we will refrain from buying oil at current prices and will prefer its sales on the intraday basis this week. Until it becomes clear that investors and traders are fully aware of the situation. Yesterday, the foreign exchange market was relatively calm. The only exception is the British pound. Moreover, the reason for its splash was not macroeconomic statistics, which would be logical, since the data were published very important (GDP and industrial production), but traditionally news regarding Brexit. Nigel Farage has said the Brexit party will not field any candidates against the Conservatives in the 317 seats they won at the last general election. Motivation is the desire to prevent a second referendum on Brexit. The pound on this news naturally grew, since the chances of a “soft” Brexit increased. However, we believe that in the current political situation, any “scenario” play into the hands of the pound. So its purchases, in our opinion, remain relevant. Our idea is confirmed by yesterday’s reaction of the pound to rather weak macroeconomic statistics. Industrial production in September fell by 0.3% (forecast: -0.1% m / m), and GDP for the third quarter grew by only 0.3% (forecast: + 0.4%), and the state of the trade balance significantly worsened ( -12.541 billion against -10.825 in August). However, the pound has grown steadily We also do not forget to sell the Russian ruble, which again trades above 63.50, hinting that paired with the dollar its next target is 65.
Long
by Trade24Fx
Unrealized potential and plans for the futureJapan, Canada and the USA central banks' decisions, U.S. and Eurozone GDP latest statistics, as well as data on the US labour market 7 days latest news. In principle, each event from this list would be enough to fill the average week. As for the political aspect: a signal about possible problems in trade negotiations between the United States and China, the next parliamentary elections in the UK and ongoing impeachment process against Trump. The absence of significant movements in the foreign exchange market last week surprised us. The change of more than 100 points +/- was observed in most pairs. However, we consider this rather as an opportunity for trading, since unrealized potential has accumulated in prices. Accordingly, we plan to take up its implementation in the current week. Perhaps the greatest potential has accumulated in the US dollar. The Fed rate cut (the third in 2019) was unnoticed by the markets. Statistics on the US, which came out last week, although was better than forecasts (GDP and NFP), still made it clear that the general state of the US economy is deteriorating. The USA non-farm payroll (NFP) for instance. + 128K was 50% higher than analysts' forecasts, who expected growth at 85K. It would seem that the dollar should have just soared based on such data. But on the other hand, + 128K is 20-30% worse than the average value for the last couple of years. Also, the ISM index in the US manufacturing sector in October, published on Friday, was 48.3 points only (a value below 50 indicates a decrease in manufacturing activity). In our opinion, the dollar fell following the results of the week should have been much stronger. And since it did not happen last week, it will happen on this one. Therefore, we will continue to look for opportunities for dollar sales in the foreign exchange market. The Canadian dollar is a nice candidate for that. The Bank of Canada left the rate unchanged, that is, the percentage differential between the US dollars and Canada declined. The main Canadian dollar issue was news that the Chinese do not believe in the possibility of a long-term trade deal with the United States, while Trump stays in power. That is concerns about the ongoing trade war. Accordingly, commodity currencies were under pressure. But the value of the safe-haven assets grew: gold and the Japanese yen. We recommended buying them last week and will continue to do so in the current week. Note that under the current conditions, the formation of a trading portfolio, that is, when buying a Canadian dollar, it is advisable to have yen and gold in the list of positions. On Friday The Russian ruble paired with the dollar strengthened quite well and as a result, even closed below 63.50. Formally, it opens the way to further decline to 62.50 area. Despite this, we continue to recommend the USDRUB purchases. Everything goes according to the plan announced by us earlier: the first time of purchases from 63.60, the second one we start at about 62.60. So if someone has not bought a pair, you can do it now purchase at 63.60, and who is already in position should wait for an attempt to hit the 62.50.
Long
by Trade24Fx
Results of Central Banks, US GDP and ADPLet’s analyze the key events of yesterday. Consumer confidence in the Eurozone is rather depressed, as indeed the entire economy of the Eurozone. But at the same time, the euro did not show any specific movements. The dollar, on the contrary, despite the relatively good statistics, was losing its way. Preliminary data on US GDP for the third quarter came out much better than analysts' forecasts (+ 1.9% y / y with a forecast + 1.6% y / y), consumer spending also showed growth. Employment data from ADP (especially important in anticipation of tomorrow's data on NFP) also higher than expected (+ 125K with a forecast +110 K). Although we note that fact that USD paired with the Canadian dollar strengthened due to the decision of the Bank of Canada to leave the rate unchanged. Therefore the USDCAD provided an excellent opportunity for its sales, as we recommended in yesterday. It means that you can sell it today. The main event of yesterday, of course, was the announcement of the decision of the Federal Open Market Committee. The rate was cut by 0.25%. As a result, the dollar continued to suffer losses in the foreign exchange market. Our recommendation on the dollar remains unchanged - we are looking for points for its sales. Tomorrow we are waiting for the official statistics on the US labour market, which is likely to lead to the formation of a full downtrend. But we will talk about this tomorrow. The Bank of Japan: the rate is unchanged. The press conference of the Central Bank will take place after the publication of this review, so we’ll talk about its results tomorrow. In the meantime, we tend to buy the yen primarily against the dollar. Today we are waiting for the statistics on GDP growth in the Eurozone, data on personal income and expenditure in the United State to come out. Our recommendations for today: sale USDCAD, as well as the dollar as a whole in the foreign exchange market; buy gold and sale the Russian ruble.
Short
by Trade24Fx
Brexit postponed, last quiet day of the weekThe Brexit date is set to be delayed until 31 January Again. Johnson, as promised, asked parliamentarians to call early elections in December. He has failed to win on Brexit. Johnson said that he would make another attempt today and said that without early elections, it would not be possible to ratify the agreement with the EU. Today will be the last relatively calm day in the foreign exchange market, because on Wednesday the Fed and the Bank of Canada will announce their decisions, on Thursday we expect news from and the Bank of Japan, well, on Friday we are waiting for data on the US labour market to come out. So it will be an extremely interesting and volatile week. But we will talk about these events as they approach. And today we suggest focusing on trading using the stochastic oscillator. That is, we trade without obvious preferences according to the signals from hourly oscillators - we buy in the oversold zone and sell in the overbought zone. But at the same time, we do not try to impose our will on the market and fix our positions with relatively small stops. List of our current trading preferences as follows: selling the dollar, buying gold and the Japanese yen, selling the Russian ruble and buying oil on the intraday basis. -Some of the positions may change their direction, so new prospective options could be added. For example, purchases of the Canadian or Australian dollars against the US dollar. The only thing that keeps us from actively recommending the purchase of commodity currencies is their approach to important levels. The Canadian will have a chance to hit the key support on Wednesday when the results of the meetings of the Bank of Canada and the Fed will be announced. The Australian dollar may take advantage of the possible sale of the US dollar on Wednesday after the Fed’s decision and also gain a foothold above 0.6880.
Long
by Trade24Fx
Get ready for Fed decision, Brexit & bullish oil marketBrexit was accustomed to being the main news generator last week, at least for the pound pairs. Parliament refused to vote for the deal until it made changes to British law, which meant the need to request a postponement. In our opinion, this is just a way to publicly humiliate Johnson, who has repeatedly said that October 31 will be the end date. As a result, Johnson sent a letter to the EU asking for a postponement, but “forgot” to sign it. In the EU, instead of a postponement, decided to wait until the British agreed on something. It is all about the special election. On Monday, this issue will be put to a vote in Parliament. In general, the week will be hot for the pound from its very beginning. Well, the date of October 31 is Thursday of the current week. So get ready for the sharp spike in pound volatility. Generally, we remain bulls on the pound - the issue of leaving without a deal is practically removed from the agenda, so this is a sign for buying the pound. But its decrease by several hundred points against the background of negative news from Parliament / Government of Great Britain or the EU is quite possible. So do not forget to put stops and monitor the news background. The current week for all other participants in financial markets (except the British) will be interesting first of all by announcing the Fed's decision on the interest rate on Wednesday. The current consensus - lowering the interest rate, and then will put the process of changing rates to a pause at least until the end of the year. We’ll talk more about this on Wednesday before the event. Unexpected for the markets Central Bank of Russia decreased the interest rate by 0.5%. Given that the ruble came close to our settlement point No. 1 for the sale of the ruble, we recommend opening long positions in the USDRUB from current prices in the region of 63.60 with a minimum target in the region of 65.20. The second round of purchasing starts at about 62.60. And a few words about the oil market. Formally, our recommendation to buy in the region of 51.20 with goals 56 last week worked out completely. Knowing how events are developing, there is a chance to raise the growth target - oil may well reach 60 (WTI brand). According to Baker Hughes, the number of oil rigs in the United States fell by 17 to 696 units. Thus, their number has fallen to its lowest level over the last 2.5 years. Recall, last week, US oil inventories decreased by 1.7 million barrels. So this week we are looking for points for oil purchases. The goal until the end of the week is 60. But at the same time, do not forget to set up small stops.
FX:USOILLong
by Trade24Fx
US oil prices had their biggest spike. How to earn on it?US oil prices had their biggest spike. Oil prices soar after attacks on Saudi facilities and ended nearly 15% higher on Monday. Abruptly ceased more than 5.7 million barrels per day of production. We consider this situation a unique opportunity for earning. The fact is that the disappearance of 5 million b / d of oil is a temporary phenomenon. According to some estimates, most of them will return to the market in the coming days. Also, Trump is ready to sell oil from US strategic reserves to stabilize the market. Accordingly, the current growth is an emotional reaction. So oil will be adjusted. Given the scale of yesterday's growth, the correction will also be significant. So today we recommend oil sales. It may be necessary to be in the position for several days, but the goal is clearly worth the time spent. Another opportunity for earning. The Russian ruble entered the sales zone. The next round of sales (final) we will start with 62.50 (unless, of course, the price reaches these marks). And finally, the recommendation to buy gold and other safe-haven assets is also relevant in the light of current events. The US has already managed to blame Iran for the attack, so in theory, the situation could be developed. Meanwhile, financial markets received another batch of evidence in favor of the global economic slowdown. This time, China gave cause for disappointment and concern. Industrial production in Sino grew by 4.4%, which is the minimum increase since 2002 (!). So if the oil shock goes on, the chances of a global recession will increase. Today is formally out of surprises. It is worth paying only to industrial production in the USA. But in general, markets are beginning to prepare for the Fed results announcement. But we’ll talk about it tomorrow. And today, we note that dollar sales are still one of our priorities in trade.
FX:USOILShort
by Trade24Fx
Waiting for Jackson Hole, riot in Britain and ruble problemsWe have already noted that this week promises to be calm but The Jackson Hole Economic Symposium is an annual symposium, traditionally gathering representatives of all the leading Central banks in the world, might give enough reasons for bursts of volatility. The most vulnerable are the euro and the dollar. Weak inflation in the Eurozone (yesterday's report showed that consumer inflation in the Eurozone fell by 0.5%), So the euro is definitely in danger. As for the dollar, Powell's performance is scheduled for Friday expecting from him a hint to the next Fed rate cut in September. It will be a hit to the dollar. We consider the current dollar growth an excellent opportunity for its sales. Meanwhile, in Britain, a statement by opposition leader Jeremy Corbyn that he promises to take any action just to prevent an exit without a deal is gaining momentum. As a result, the issue of early parliamentary elections is being increasingly discussed in the media. And although in any other situation we would say that this is a negative sign for the pound, in this particular case, early elections are more likely positive, since they reduce the likelihood of a “no-deal” Brexit, therefore this is the reason for the pound to grow. So the descent of the pound paired with the dollar of 1.21 is a good opportunity for the pair to buy: both on the intraday basis and medium-term positions. Given that there is a chance that the pound value might growth this week, and the euro, on the contrary, a decline, it makes sense to pay attention to the sales of the EURGBP. This can be done simply from current prices. Another promising deal continues to be sales of the Russian ruble. And although it has already lost quite a lot of its value, the potential for its decline is far from being exhausted. Argentina scared investors around the world and showed how it could be dangerous to invest in risky assets. So the already “toxic” ruble has become even less desirable. In this regard, recall our recommendation to buy USDRUB. We advised buying it when the pair fluctuated around 63, but even now the pair’s purchases do not look hopeless. Total, today we will sell the dollar primarily against the pound and the Japanese yen. Also, we will sell EURGBP, as well as the Russian ruble. Gold continues to be an extremely interesting asset for short-term speculative trading. In the current uncertainty, we choose the tactics of oscillatory trading without obvious preferences, that is, we buy in the oversold zone and sell in the overbought zone (as a guideline, it is quite possible to use classic RSI oscillators or more advanced versions of oscillators developed by our experts for a deeper analysis of the price dynamics).
Short
by Trade24Fx
Getting ready for a pound move and earning with USDCADThis week is not that much eventful for the financial market however there is an exception - Friday. A block of statistics from the UK, including data on GDP and industrial production. The general slowdown in the global economy, not positive expectations of experts may well come true. The current forecast for UK GDP growth in the second quarter is 0%. That is, too close to the negative zone. The decline in GDP will be a significant and negative signal for the pound. So, we are not sure about its purchase today. Especially when you consider the extremely aggressive rhetoric from the current British authorities regarding Brexit. The thesis "Brexit at any cost" continues to dominate. In general, today for the pound may well be the day of the start of a big move. The fact is that the consolidation at the bottom is clearly delayed. For more than a week, GBPUSD has been fluctuating in a range of 100 pips. This is extremely atypical for a quite volatile couple and, as a rule, is a sign of big movement. The spring is compressed to its limit, and today's data could straighten it, causing a sharp increase in the pound. Today we see the following plan for working with GBPUSD. Weak data and sinking below 1.21 mark is a signal to sell the GBPUSD with minimum targets at a low of 1.20. But if the data turns out to be better than forecasts, the “spring” may straighten in the opposite direction. In this case, a full correction in GBPUSD is inevitable. Therefore, we consider the good data, along with the rising above 1.22, as a strong signal to buy with targets 1.2420. As for other statistics, a large block of data on the Canadian labor market will be published. Our recommendation is to trade on the news. 2-3 minutes before its release, we place pending orders “buy stop” and “sell stop” at 15-20 points from the current price. We are waiting for the data and earn. It is worth noting a certain yuan stabilization - China is trying to show that it was just a demonstration of power and not a currency war. Rising tensions and concerns in global financial markets, demand has grown not only for gold and the Japanese yen but also for US Treasury bonds, traditionally the main object of interest from institutional investors and central banks from around the world. As a result of the growing demand for US treasury bonds, demand for the dollar naturally grows (inverters need dollars to buy bonds). So it seems Trump has outplayed himself. And instead of provoking the dollar devaluation, and increased demand for it and exacerbated the already unpleasant situation for the United States. Nevertheless, we do not plan to change our position yet and recommend selling the dollar on the mid-term and intraday basis. As for our other recommendations, we are still interested in selling the Russian ruble and oil, as well as buying the Japanese yen.
by Trade24Fx
Currency manipulator & Goldman Sachs forecastsAfter China devalued the Yuan on Monday, markets were awaiting a US response. It appeared quickly enough: The U.S. Treasury Department announced late on Monday that it had determined for the first time since 1994 that China was manipulating its currency, knocking the U.S. dollar. Maybe in response to this, or maybe just to show that the fall of the renminbi on Monday is just a power struggle, the People’s Bank of China took steps to stabilize weakness in the yuan. As a result, its fall has stopped and even strengthened somewhat. Although the Yuan against the dollar remained above 7. Investors yesterday were able to take a breath. Haven assets after strong growth on Monday, adjusted on Tuesday. Given that the situation remains tense and uncertain, we continue to recommend the Japanese yen and gold purchases. We also continue to recommend selling the dollar. Against the background of such a development of events, it is more than logical and to expect a further rate cut. Currently, according to the Chicago Mercantile Exchange, 100% of traders expect the Fed rate cut in September. But there is another interesting point. If last week only 1.5% of traders expected a 0.5% decrease, then this week the percentage was already 21.5%, that is, the probability increased sharply - almost 15 times up(!). Thus, we are talking about the reduction of the rates two times in a row. And the dollar is still extremely expensive. So the opportunity for its sales is unique. It’s even strange why the markets cling to their purchases. Goldman Sachs Group Inc. recently published their vision of the current situation in the world. Their forecasts are: the Fed will lower the rate in 2019 at least 3 times, a trade war will continue until 2020, and still Trump is the President we should not count on its end. In general, the vector of development of events has not yet changed. Therefore, our basic trading recommendations are also unchanged. In addition to selling the dollar and buying safe-haven assets, we continue to sell oil and the Russian ruble. We also hold long positions on the pound and those who do not have them have the opportunity to buy at very attractive prices.
by Trade24Fx
US-China trade war is starting to get out of handChina loses patience. After Trump attacked China, markets have been waiting for China to the response. Sino inflicted several very strong and unpleasant hits for the United States and Trump personally. One . China lowered the value of the Yuan below its 7 to 1 peg against the dollar in response to a new series of U.S. tariffs. Thus, China partially solves the problems of its exporters arising from US sanctions. Recall, exporters are going to benefit from the devaluation of the national currency. As a result, with constant sales volumes in dollars, exporters receive more. Which, in fact, artificially inflates the financial results of exporters. Note that Trump for more than a month has been talking about the need to devalue the dollar to support American companies, but so far he cannot find support either from the Ministry of Finance or from the Fed. At that time, China one day solved this problem for itself. Two . China Halts U.S. Agriculture Purchases. One of Trump's main complaints against China was the decline in US agricultural imports. What caused direct harm to US farmers and the US economy as a whole. So, the Chinese government has asked state-owned enterprises to suspend US agricultural imports. This is a severe hit to the pride of Trump and the US economy. Three . Bank of America Merrill Lynch warns that China may cross out US administration’s success in restricting Iranian oil exports. US the sanctions and about 2 million barrels per day of crude has been forced out of the oil market, and BofAML believes that China if desired, can return a significant part of them - about 1.5 million b / s. What does this mean for the USA? A powerful diplomatic slap in the face, as well as potential problems for the whole US oil sector. The simultaneous release of 1.5 million b / d of oil to the market will lead to a sharp drop in oil prices. Analysts voiced estimates of decline up to $ 40 per barrel. And this will put the US oil industry on the brink of survival, or even beyond. Total - everything is bad. Trump may well go to the next level of the conflict escalation. Too painful hits inflicted by China. And this means that commodity assets, including oil, should be sold. A save haven should be bought. We sell the dollar because one of Trump's possible reactions is the dollar devaluation. Currencies from developing countries are also worth selling. The Russian ruble which is under triple (or quadruple) pressure: falling oil, trade war, Russia's Central Bank cut its key interest rate, new sanctions by the United States, dispersal of rallies in Moscow, and this is not counting the main reason for the sale of the ruble - a weak economy of the Russian Federation.
FOREXCOM:XAUUSDLong
by Trade24Fx
2
EURRUB | A Possible Mid-Term BUY Area.Hi, Slowly I start to add some mid-term (weeks, months) trading & investment opportunities into my TradingView account. The first one which looks technically pretty nice is EURRUB. Pretty soon you can start building your long position on EURRUB and it starts from the round number 70. Obviously, do your own research, read fundamentals and etc. Technical criteria are: 1. Previously worked resistance becomes support. In 2017, this level worked 2 to 3* times as a resistance level. Actually, it has worked also as a support level - in 2016 July and 2015 October-November 2. The round number 70 should act as a support level 3. The black trendlines make this wide support area much stronger 4. Weekly EMA200 acts as a support level. 5. Minor trendline (blue) third touch matching exactly with the blue box. This minor trendline is also a lower trendline from the bullish chart pattern "Falling Wedge". It is just information because patterns are only then valid when the breakout has occurred! 6.(!) Wait for a bullish candlestick formation to be more secure. As said, do your own research and if this matching with mine then you are ready to build your long position! Please, take a second to support my effort by hitting the "LIKE" button, it is my only fee from You! Best regards, Vaido
Long
by VaidoVeek
1
Dollar Anomaly and the Fed DayBritish pound reached a three-year low yesterday. The pound was sold out on growing fears of a potential ‘no deal’ Brexit. Investors perceive Johnson's words at face value. We do believe that nothing more than a snare which is based on an attempt to gain an advantage in the negotiation process. So, the markets are wrong, and the pound current price does not correspond to its REAL PRICE - it is very undervalued. Therefore, we continue to recommend its purchases across the entire spectrum of the foreign exchange market. Especially against the dollar. As for the dollar, the situation has not changed much - it continues to show its strength although today the Fed might deal a severe blow to it. We have already noted that the markets estimate the likelihood of curring the interest rate at 100%. The current probability that the interest rate will be reduced 3 times by January 2020 is about 70% (!). And this is a serious signal for dollar sales, that is going to be a cycle of rate cuts, that is, a reverse in the Fed’s monetary policy. The vector change cost 15% loss of the dollar price. Once again, we note that the foreign exchange market cutting the interest rate probably did not take into account. For example, the stock market has responded with new historical highs — a “classic” reaction for such situations. The bond market also took into account this. And the dollar in the foreign exchange market behaves abnormally. Anomalies do not often occur in the financial markets and this fact must be used. So today we sell a dollar. In addition to buying the pound and selling the dollar, we will continue to sell the Russian ruble and oil, buy the Japanese yen.
TVC:DXYShort
by Trade24Fx
1
Illusions: do not cheat but earnThe pound hasn't been consistently lower since 1985. Mr Gove told reporters earlier: a “no-deal Brexit is possible”. Boris Johnson is refusing to sit down for talks with EU leaders until they agree to ditch the Irish backstop from the Brexit withdrawal agreement. Entry-Exit will cast approximately $ 1.2 billion. Well, Europe is satisfied with the current deal version. Despite that fact that the British pound was sold out on growing fears of a potential ‘no deal’ Brexit, we believe that the parties negotiate better bargain for themselves by voicing extreme positions. That is a big game. And understanding of its rules throws the entire perception of reality into the adequate one, including the British pound future dynamics. In our opinion, what is happening with the pound is a one form of deception, an illusion, a false reality is formed on the market. One of the manifestations of this is the pound current prices and its price dynamics. We believe that it is a significant opportunity for purchasing. The question is if you have got enough patience to wait for profit. Meantime, we are on track in the punchline of this summer, or of 2019, in the foreign exchange market. The Federal Reserve's Review of Its Monetary Policy Strategy. We already wrote that the current consensus in the market is a cut rate (according to the Chicago Mercantile Exchange 100% of traders believe in). However, the dollar is in the area of two-year highs. Seems lake on Wednesday they are planning to increase the rates. Do not forget about the GDP (2.1% in the second quarter, 3.1% in the first), impeachment against US President Donald Trump, possible foreign exchange interventions by the US side, etc. Why is the dollar so expensive? Isn't it time to be discounted under the Fed decision? In the end, cutting rates of the central banks is the strongest bearish signal for the currency. As an example, the Fed cut rates in 2007-08, during that the dollar lost about 15% (!) Of its value. In our opinion, we are dealing with a classic “divorce”. Markets test traders’ "strength." So, those who pass this test earn. So our recommendation is: sell the dollar or keep the existing short positions. So, despite the dollar growth yesterday, our trading recommendations are unchanged: we will continue to sell the dollar, as well as selling oil and the Russian ruble.
Long
by Trade24Fx
New British Prime, Yen vs.GoldBoris Johnson became UK prime minister after the decisive Tory vote. He beat Jeremy Hunt comfortably, winning 92,153 votes to his rival's 46,656. What does this mean for a pound? The entrance to the turbulence zone. The Brexit negotiations, which were essentially frozen for several months, will again enter the active phase. Johnson is known for his attitude to Brexit: exit from the EU. What does this mean for a pound? A strong decline due to no-deal Brexit. What is the likelihood of this scenario? In our opinion, extremely low. The British Parliament has already made it clear that Johnson simply will not gain votes for this. Which leads us to the logical conclusion - would not be accepted a no-deal withdrawal. This means that the current price of a pound is a great opportunity for its cheaper purchases. Is there any chance that the pound will decline more? Definitely yes. Possible decline in pound price is recommended to be used as a possibility to increase the size of the longs in it. Meanwhile, Analysts at Goldman Sachs analyzed options for investing in haven assets and concluded that the Japanese yen is a good option. Motivation - gold is too volatile. This significantly increases the risks of such investment, when the yen looks less risky. Another argument in favour of yen. This year, gold has already increased by 11%, and the Japanese yen - only by 1.6%. That is, from a position of overvalued/undervalued yen looks undervalued against the overvalued gold. Well, the final argument in favour of yen purchases - in case of interventions from the US, the USDJPY price will decline sharply. Recall, we have been recommending selling USDJPY for a long time. As for our other trading recommendations for today, they are unchanged. We will continue to look for opportunities for selling the dollar across the entire spectrum of the foreign exchange market, buying the pound against the dollar as well as against the euro, selling oil and the Russian ruble, and also buying the Japanese yen against the dollar. As for gold, considering how high it climbed, for the time being, we will trade it with no clear preference, buying from oversold zones and selling in overbought zones.
Long
by Trade24Fx
China concessions, oil and IMO 2020, BoA listYesterday was not that eventful for financial markets. As for the general background, the Chinese state media that Sino is ready to make concessions to the United States (mainly, it is about importing food from the United States) and is preparing for “personal” negotiations with the United States instead of current telephone diplomacy. In the oil market, despite the external calm, everything is quite alarming. Theresa May convened an emergency meeting in response to Iran seizure of a British tanker in the Strait of Hormuz that have led to an increase in tension. However, the effect was limited in forcing price levels, as the markets do not want to develop a conflict. Today we want are writing about the upcoming revolution in the oil market and the IMO 2020 standard. One of the main oil consumers are ships that burn 3 million barrels per day. So from January 1, 2020, the International Maritime Organization (IMO) tightens standards, reducing the maximum sulfur content in marine fuels (from 2.7-3% to 0.5%). Shipowners will begin to reorient their ships to such clean fuels as LNG, which could significantly reduce the oil demand. And more about the prospects. Bank of America identified the most “overheated” markets and assets, as well as identified positions that look most threatening in case of problems or force majeure. These are US treasury bonds purchases, the US technology sector shares purchases, and purchases of investment-grade bonds. So if you have such positions you should think about whether it’s time to close them or replace. As for our trading recommendations for today, they are unchanged. We will continue to look for opportunities for selling the dollar, buying the pound against the dollar as well as against the euro, selling oil and the Russian ruble, and also buying the Japanese yen against the dollar. As for gold, considering how high it climbed, for the time being, we will trade it with no clear preference, buying from oversold and selling from overbought zones.
FX:USOIL
by Trade24Fx
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
EURRUB: Sell opportunity on 1W.The pair has been trading inside a very clear 1W Channel Down (RSI = 42.482, MACD = -0.781, Highs/Lows = -0.2727) since the start of 2019. Clear Lower Highs (for sell entries) and Lower Lows (for exits). Such is the most recent rejection at 73.3540. We are short targeting 71.700 which is the 1M Support (Resistance until April 2018, Support since and until this April). This is a cautious trade as despite the marginal cross of this 1M Support on April 22, it still has the capacity to initiate a new long term bullish sequence above 79.00 - 80.00. ** If you like our free content follow our profile (www.tradingview.com) to get more daily ideas. ** Comments and likes are greatly appreciated.
Short
by InvestingScope
Second stage of EM rally?After previously tracking the reversal (see attached: "Another key reversal in play in USDRUB") finally the break of 65 has come. From a technical standpoint this was important as it unlocked the 62.5 lows. Russia has been one of the out performers on the currency board so far this year and I continue to see scope for more gains, irrespective of the very near term reversal in dollar. The risk here to the setup is coming from sanctions related risk. Russian authorities have been quick to take measures to insulate the economy (reaction to DASKAA bill). Best of luck all those trading EM and thanks for keeping the likes and comments rolling
Short
by ridethepig