News background and trading ideas for 12/11/2018

12 lis 2018

Last week ended for the dollar definitely on a positive note. And if the last week began with doubts that involved the concerns about the outcome of the midterm elections in the United States, then after the announcement of their results, fears somewhat decreased. And on Thursday, the Fed once again played up the dollar, so much that the dollar continued the growth on Friday.

Amid quite intense past week, the current one promises to be rather calm on the news background. At least, there are no scheduled causes for strong bursts of volatility on the horizon. There will be a lot of UK statistics and data on consumer inflation in the USA and GDP in the Eurozone though, so you will not be bored anyway.

Considering the priority trading positions and our current recommendations, the sales-off of the pound on Thursday-Friday and from the beginning of the current week - it’s an excellent reason for its cheaper purchases. In general, the following tactics appears (while the agreement between the EU and the UK continues to hang in the air): part of the pound position should be attributed to the midterm with targets under 1000 points, but part of the position should be varied to buy a pound on such descents, to fix a part of the position in plus on the fact of reaching 150-200 points of profit. Taking into account the abundance of macroeconomic statistics for the UK this week, such tactics may well prove itself. In the meantime, the pound continues to decay. The cause is the same one - Brexit and other issues in the negotiations process. According to The Sunday Times, the European Union rejected a proposal by the British Prime Minister for Brexit. Besides, on Friday, November 9, Joe Johnson - Minister of Transport - resigned. And there is information that four more ministers are going to act like him. So the current sales of the pound more than explainable.

The oil market this weekend got a very strong bullish signal and already today it has been running off. We are talking about the outcome of the meeting of OPEC and its allies in Abu Dhabi. Saudi Minister of Energy Khalid al-Falih stated on Sunday after the rally of the OPEC + ministerial committee on monitoring that the country will decrease production by around 500 thousand barrels per day from November to December. Russian Energy Minister Alexander Novak replied that Russia is ready to cut production if such decision is passed through the coalition of producers, including OPEC.

Recall, we recommended selling oil when it was still around $75 per barrel (WTI crude oil), but today, taking into account such news, we recommend temporarily fixed open short positions on oil and monitoring how events will develop.

We have to admit that, albeit belatedly, the Russian ruble began to regain the fall in oil. Considering that oil has lost about 20% of its value lately, the potential scale of the collapse of the Russian ruble makes its sales one of the most promising deals of the current fall.

Gold has fallen into risky zones in terms of its purchases. But in a case today is marked by another black candle, it may be necessary to revise our views on the feasibility of long positions in gold under the prevailing conditions. Nevertheless, purchases from current ones seem very attractive to us so far, at least because the profit/stop ratio is almost perfect.