Trade24Fx

The last days of Theresa May, more trade wars, worst week of oil

Long
FX:EURUSD   Euro / U.S. Dollar
The previous week was tough for financial markets due to the escalation of the trade war between the USA and China, which, moreover, have taken new forms like US attacks on Chinese technology companies.

At the same time, the White House is not planning to stop. The tariff epidemic will spread to other countries, primarily those of them whose currencies are artificially undervalued. Recall that the undervaluing of the national currency provides a powerful competitive advantage in international trade.

In general, things rapidly get worse. We noted that this confrontation may become a new reality, in which it is worth getting used to living in now.

Another key event was Theresa May’s resignation. The inability to provide Brexit provoked Theresa May's resignation. She will remain in office until June 7, when her successor will change her. Most likely Boris Johnson will be. The pound, as we announced in Friday’s review, has grown due to this news. That only confirms the loyalty of our vision and recommendations. So this week we will continue to look for points for buying of the pound, including the medium-term position.

The previous week was the worst for oil for the entire 2019. The reason is the exodus of investors from risky and commodity assets amid fears of a sharp slowdown in the global economy. This scenario was viewed by us as a baseline, and from the very start of the last week we recommended oil sales. So those readers who followed our advice should have made very good money. On Thursday alone, oil lost about 6%.

About the upcoming week, we note that its main events, perhaps, will be the announcement of the Bank of Canada decision on the parameters of monetary policy , as well as data on US GDP for the first quarter (revised). For the rest, the trade war will remain in focus.

As for today, we are waiting for a thin market and potential spikes in volatility on level ground. So you should trade carefully.

Our trading positions for the week did not change much: we will look for points for buying of the euro against the US dollar , sales of oil and the Russian ruble , as well as buying of gold and the Japanese yen. In addition, we begin to buy a pound.

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