News background and trading ideas for 28/01/2019

28 sty 2019

Last week was marked, as already familiar, by a shutdown in the USA (eventually talks about possible credit downgrade in the US have appeared), as well news from Brexit fields (markets believed in a problem solution out of context “exit without a deal”).

As for the dollar’s sell-offs om Friday, it connects at first with shutdown (it’s already reached the point that one of the busiest airports in the country was forcibly closed due to lack of personnel) and secondly the arrest of Republican Roger Stone, the man next to the US President Donald Trump. Stone was arrested on Friday in Florida as part of an investigation into the alleged collusion of Trump's campaign headquarters with the Russian leadership during the 2016 election campaign. The arrest recalled the markets that the investigation against Trump continues, and has quite substantial results. Accordingly, investors fear the development of a political crisis in the United States with the possible impeachment of Trump in the end. As for the shutdown, the financing of government bodies is temporarily open until February 15, but by and large, there is still no settlement between the parties.

Another quite amusing moment, fixed on Friday, became a sharp growth of the EURUSD pair. Obviously, the credit goes to the declining dollar, but most significantly that this growth was on another portion of weak statistics data: according to the IFO, the business climate in Germany turned out to be much lower than forecast.

The sharp rise in gold on Friday and the breakdown of resistance in 1294 actualized the uptrend, and this week we decided to reconsider our position on the asset. While it is above 1294, we are looking for points for gold purchases.

The oil market has recently been out of the investors' attention, but we cannot but note a sharp increase in the number of drilling rigs in the United States. According to Baker Hughes, the number of working oil rigs has grown by 10 units. However, before that the indicator had been decreasing for three weeks in a row, so, for now, we can only speak about the appearance of breaking the trend. It is not surprising that oil took the news rather calmly. Volatility in the area of 50.00-53.50 continues, but the strong movement is coming. So you need to be ready to become in its tracks.

As for macroeconomic statistics and other events, the week promises to be really intense: the announcement of the Fed's decision on the interest rate (Wednesday), the British Parliament vote on Brexit (Tuesday), US GDP data (Wednesday) and the Euro zone (Thursday), the heads The ECB and the Bank of England (today) will complete all this statistics on the US labor market.

This week we continue looking for points for the pound's purchases (but acting with regard to tomorrow, when will take place another Parliament meeting on Brexit issue), as well as for the dollar sales generally. Besides, while oil has not taken hold above 53.50 (WTI brand), we recommend its sales. The conditions for buying gold we voiced above. Recommendations for the Russian ruble sales continue to be relevant.