News background & trading ideas for 18/02/2019

18 февр. 2019 г.

The past week has not resolved the main issues of concern to the markets. The negotiations process between the USA and China continues, and there is no finish line yet. Brexit continues to be on the same page yet despite that the time is running out. It seems the matter of funding the wall in the USA is getting worse: the shutdown was avoided, but Trump has declared the state of emergency after all. The goal of such actions - to unblock necessary to build funds (in Trump’s view it is about $6 billion). So it is likely it will be the feedback from the Democrats: the trials, protests, etc. Anyway, Trump is doing all his best to make the news background extremely eventful. The dollar is under big pressure amid such activity. Well, we continue this week to recommend the dollar’s purchases in the foreign exchange market.

The week was also remembered by weak macroeconomic data from almost everywhere: the Eurozone, the United Kingdom, and even the United States (the failed retail sales on Friday were supplemented by equally awful figures on industrial production). The exception was the statistics from China, which has shown a sharp increase in exports in the Celestial Empire.

Among other developments of the past week, it is worth remembering enhancing of the new sanction’s processes against Russia. Buyers of the Russian ruble slightly relaxed after November, when the USA did not impose the hellish sanctions, moreover the change in leadership of Rosstat and the “sharp growth” of Russia's main macroeconomic indicators after that created the illusion that everything was good for the ruble and it strengthened well. We’ve been recommended using it and selling the Russian ruble. We can not fail to note another notably unpleasant news for the ruble: the arrest of the founder of Baring Vostok, Michael Calvi. One of the oldest and largest venture capital funds invested in Russia. Some experts identified this event as a fatal. So, basically, it is almost impossible to invent more effective sanctions. Regarding the current week, it promises to be relatively calm after a very rich previous one, at least for macroeconomic statistics. So obviously, we'll continue to monitor the ongoing events and keep our followers aware of the most significant ones.

Today, due to the days-off in the USA and Canada, promises the appearance of a “thin market” in the afternoon, so you need to be very careful because instead of the expected calm we can get another flash crash.

Our trading positions are mostly unchanged: we sell the dollar on almost all fronts (with the exception of the Japanese yen - as long as USDJPY is above 110 we are looking for points for intraday purchases). While gold is above 1294, we are looking for points for its intraday purchases as well. Last week, this tactic worked out excellent, and we see no reason to change it. We also sell the Russian ruble, which last week also made it possible to make good money.