News background and trading ideas for 13/02/2019

Yesterday the particulars of a tentative agreement between Democrats and Republicans were known. Parliamentarians agreed to allocate $1.375 billion for building a wall. It is now up to Trump and he has some difficulties with this because he needs $5.7 billion for this aim. So the dollar buyers have to stay focus anyway. Our position is unchanged so far - continue looking for points for dollar’s purchases. Optimistic signals from the fronts of negotiations process between the US and China continue to be received (it’s been a month since its coming, but there is no actual process yet).

Brexit's spring continues getting tighter. But according to the incoming news, Britain is going to wait till the last. It means until the last week of March when the EU summit is to be held, where they will try to form a new version of the agreement. Consequently, the UK Parliament will vote on a new treaty almost on Brexit’s day. By and large, voting in such conditions will not be for an agreement itself, but for the exit "without a deal" or "with one." May's tactics are understandable, and generally, have great chances of being efficient. For us, there is nothing new in this news. We warned of such scenario (wait till the last minute) in September yet. So everything goes as planned.

As we see, there are the same as last week or two weeks issues in the light. Consequently, the equilibrium in the financial markets has not changed much. So, there is no sense waiting for big and direct movements so far. It would seem reasonable to focus on intraday trading.

As for today, the key events will be the publication of inflation data for the UK and the USA. And if in the first instance we do not assume any particular explosions of volatility (macroeconomic data is not currently in the focus of the pound), then data from the United States may well trigger a surge in trading activity in the foreign exchange market. The monetary policy of the Fed, or rather its vector, is the primary threat to the dollar in 2019. And since the stability of the national currency is the main task of any Central Bank of the World, markets can be quite nervous to statistics on consumer inflation in the United States.

The trading plan for today, bearing in mind yesterday’s decline of the dollar, is generally unchanged in that we continue looking for points for the dollar’s sales intraday and mid-term.

Our yesterday’s recommendation for sales of the USDCAD pair worked out pretty well, so if today the pair decide to go up to 1.33 again, we’ll sell it again. Stops are above 1.3350. Profits - 1,3200.

Gold also made it possible to “bite” a small piece from the market. Therefore, our intraday recommendation is unchanged: buying below 1310, adding about 1295. Set minimum profits around 1320 and place stops below 1290. As long as the asset is above 1294, we see no threat for long positions.

Since EURUSD could not take hold below 1.1300, we will probably buy this pair with small stops as well. Purchases are about 1,1300. Stops are below 1.1250. Profit is in the area of 1.1420.