News background and trading ideas for 28/11/2018

28 nov 2018

Yesterday the dollar in the foreign exchange market continued to gain. What was the occasion for that? It is hard to name a particular reason for that. First of all, other expectations that the US and China will agree finally and trading wars will be ended have caused such reaction. However, we will get some clarity unless as an outcome of the meeting of G20, which will take place at the end of the current week (it will be a dinner meeting on Saturday between Trump and Xi Jinping). We can also connect the upsurge in interest with comments of Fed officials, who continue to emphasize that rate hike will continue with a projected rate in 2019 either.

However, its further growth remains in question. Technically, the dollar went to very relevant levels in pairs with the euro and the pound, as well as with the Japanese yen. So, despite the fact that this recommendation is distant from current market trends, we nevertheless recommend buying EURUSD pairs, as well as GBPUSD. Besides, you can sell USDJPY and USDCAD but do it very carefully. This should be done without much bigotry and with small stops, but it seems to us that the dollar reversal is just around the corner and in order to catch it, we have to be ahead. At the same time do not forget about today's data on US GDP. If it turns out to be above 3.5%, the dollar may receive another upward momentum. Otherwise, it is actually the GDP figures can be the reason for the start of dollar sales.

In the Brexit front, there is not sentiment against the pound purchases. Trump added fuel to the fire, who said that the agreement with the EU does not automatically mean a trade agreement with the United States. And he did hint that Great Britain could well be the new target of the US trade war against peace. But the key event is not Trump's tweets, but a vote in Parliament. According to the current information it should take place on December 11. So, right up to this day, you should not count on a robust increase in the pound. Nevertheless, it purchases are still relevant, simply because, in pair with the dollar, it has approached the most significant level of support. And last but not least, we recall that part of the pound positions can be used for the purpose of intraday profit.

A situation with new sanctions against Russia remains in the air so far, but as we have noted earlier, it is inevitable. This is nothing but a scope question. So we continue looking for points for sales of the Russian ruble. We also remind that the drop in oil by 30% has not been worked out by ruble yet. So it's just a matter of time when it starts to decrease.