News background and trading ideas for 30/11/2018

30 нояб. 2018 г.

Last 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.