News background and trading ideas for 20/11/2018

20 בנוב׳ 2018

Yesterday 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.