News background and trading ideas for 24/01/2019

Let's start with the formally most significant event of yesterday's day - the announcement of the outcomes of the Bank of Japan meeting. Technically because by and large, this Central Bank has not given occasions for explosions of volatility and the occurrence of panic waves for a long time. So this time, the parameters of the monetary policy remained unchanged, and the reduction in inflation forecasts was perceived by the markets as a dovish tone. No wonder that the yen was under pressure. This once again confirmed the validity of our current position in the yen - to sell on an upward trend.

Traditionally, a few briefs from the Brexit field. Market sentiment continues to change toward the pound. “Harsh” Brexit has gone off the agenda so far, and everyone is debating what will happen instead of it - postponement of Brexit deadline or a repeated referendum. Speaking of the last option, next week in Parliament will be a vote on amendments, which will reduce the probability of exit without a deal and parliament will get the call to decide on a repeated referendum. The initiator of the amendments was the Labour Party opposition.

The USA continues to suffer and split between Trump and common sense. So far without much success. And many officials have already talked about extending the shutdown until March. What does this mean for the US economy? According to the economic advisers of the White House, this may lead to a zero (!) growth of the US economy in the first quarter. So we don’t see any reasons to turn over into dollar purchases. Moreover, the latest data on the sale of housing in the secondary US market was frankly a failure (-6.4%, while waiting for a decline of only -1.5%).

Today is interesting first of all by the announcement of the results of the ECB meeting. However, the euro is unlikely to get any support. The economy of the Eurozone looks very unpersuasive now so the ECB could afford not only “hawkish” actions, but at least thoughts and statements. However, if the euro goes down to the area of 1.1300, from there a pair of EURUSD with small stops, you can probably try to buy. If, of course, the Central Bank does not present some frankly "dovish" surprise.