News background and trading ideas for 16/11/2018

16 nov 2018

The main event yesterday was, without any doubt, the epic fall of the pound. Namely, the fact of its sharp decline is nothing strange itself. The pound all current week was very volatile. But the scale of its fall reverberated. Less than in 4 hours the pound in pair with the dollar has lost around 300 points.

In the light of such developments, we need to remind about our core recommendation - purchases of the pound and isn’t it about time to reconsider it on “sales the pound”. So far our answer is - no, not yet. Quite the contrary entry points became extremely attractive and will be just sinning pass by such possibilities. We’ve already written about the causes of yesterday fall in a separate review. We only note, that there will be more of such panic waves. So for traders with weak nerves and a low threshold of tolerance for losses will be better stay away from this pound’s games for a while. But from the other hand, such transactions - this is the only option to achieve the ideal entry points.

Analysts - jack or jack shit had intensified dramatically. This is also a very good signal for us. If the apocalyptic forecasts sound more and more actively (“the pound will drop to 1.1”, “the pound expects a decline of 10%”, etc.), the more likely it will be the growth of the pound soon. We do not need to go far. A month ago, many experts voiced the price of oil at 100 a barrel. And where are they now, and where is oil? The same picture with the last year's Bitcoin analysts for $100,000.

Total, we continue to recommend the pound purchases.

We also continue to recommend sales of the Russian ruble, look for the points for the oil sales and gold purchases.

Besides, intraday sales of the euro against the dollar with small stops also seem to us a good deal. Especially in light of the statements of the Fed chairman that the US economy is in excellent shape, as well as market expectations for the Fed rate hike in December.

Regarding the macroeconomic statistics, yesterday’s retail sales data in the UK turned out to be rather weak, but who cares about it now. Today we are waiting for figures on consumer inflation in the Eurozone, however, we are not expecting any surprises and spikes in volatility.