News background & trading ideas for 20/02/2019

Unlike Monday, yesterday was much more exciting and intense.

Let’s start with the labor market statistics of the UK, which came out considerably well. Take a look at least at the figures on employment: +167,000 with the forecast of +151,000. Other indicators (unemployment, average wages) were released within the estimates. This created a foundation for the growth of the pound, which used in full not only this news but also the information that on Wednesday, May and Juncker will hold a meeting, which may finish with a new draft of the deal. Even the news that the Japanese car manufacturer Honda for the first time in 71 years of its existence will close the plant, which is located in the UK and produces every tenth car in the country, did not prevent the growth of the pound. This loss of 3,500 workplaces viewed not only as a loss but another alarm of what will happen to the UK industry if it leaves without a deal. Anyway, yesterday the pound made it possible for our readers to make a good profit, and we just add, that 1.31 it is far away from the limit of the GBPUSD pair growth, so we continue to recommend purchases of the pound in the foreign exchange market, much less, today a new wave of optimism may cover the pound pairs as a result of the May and Juncker meeting.

We continue to advise purchases of USDJPY. Especially in the light of the statements made by the head of the Bank of Japan Kuroda that it will take a further reduction in monetary policy. Recall, while USDJPY above 110 its purchases are a priority.

The euro paired with the dollar has also gained ground yesterday But it goes rather to the common dollar weakness than to the economic data (quite the opposite, because the data from the ZEW institute came out very weak both in Germany and in the Eurozone in general). Predictably Trump’s state of emergency underwent massive obstruction in the United States, and lawsuits started tumbling out one by one. All this, of course, can’t make the dollar buyers happier. Well, news of a possible breakthrough in Brexit also plays into the euro hands. All in all, purchases of EURUSD today does not seem to us as a bad idea.

The growth of gold was not surprising to us since we have been recommending its purchase for a while. Just want to offer our congratulations for those of our readers who follow our recommendations with a good income yesterday. Recall, in our view, the goal of the current upward movement - test 1350-1360. The goal is nearing completion, but another 10-15 dollars from the market can be squeezed out. So it remains our aim to buying, but caution is advised. Gold climbed high and can collapse very sharply and unexpectedly.

We must not be tricked by the growth of the Russian ruble. The arrest of the last and most devoted foreign investor in Russia for two months is a very clear signal of the Russian Federation to the rest of the world (we are talking about Michael Calvey, the leader of Baring Vostok). To demonstrate the level of what was happening and what is going on now, let us give you a few numbers. According to the Russian central bank, foreign direct investment in Russia decreased from $27.1 billion in 2017 to $1.9 billion last year (while in 2013 its were $79 billion). So we continue selling the ruble.