News background and trading ideas for 29/10/2018

29 paź 2018

Let’s start with an analysis of key events of last week. Bank of Canada has hiked a rate by 0.25%, ECB remained the rate unchanged and the US GDP for the third quarter (provisional value) turned out higher than analysts’ forecasts (3.5% vs. 3.3%), but this did not help the dollar much because, in the second quarter, growth was 4.2%, and besides the US stock market continues to fall and depressed the investor sentiment.

Regarding the current week, it is worth paying attention, first of all, to the Eurozone GDP figures on Tuesday (growth rates are almost an order of magnitude less than the US), the announcement of the Bank of Japan decision on monetary policy parameters and consumer inflation in the Eurozone on Wednesday. Besides, the outcome of the Bank of England meeting on Thursday and statistics on the US labor market on Friday. As we can see, the week will be more than saturated, but it will obviously give a lot of opportunities for earnings. So follow our reviews, in which we describe in detail what to do and why.

And now a little bit about the basic fundamental background and our basic trading ideas. According to the end of last week, the most failure idea was our position to buy a pound. But we have already noted that the game is very big and you need to be ready to be “underwater” for a while. We are at the climax phase so far and the denouement is close. Meanwhile, GBPUSD prices are becoming more and more attractive. Read about our motivations and goals for buying pounds in our previous reviews. Total, our position is unchanged - we are looking for points for buying the British pound.

Oil last week frankly pleased us. Recall, we recommend its long-term sales. The motivation of the deal in our previous reviews.

Meantime, the Russian ruble greets every new day with concern, because November - it’s time for a potential launching of “deadly” sanctions from the USA. Despite that, we continue to recommend selling the ruble with every opportunity. By the way, Bank of Russian Federation remained the rate unchanged by robbing thus the ruble support.

It is also possible to continue Gold purchases this week. The growth potential of the asset is far from exhausted, and the dividing line between bulls and bears around 1210 gives a foundation for a clear understanding of which side an advantage is now. And the general fundamental background, in general, plays into the hands of buyers.