"Authorities" put on the British pound

Trading 15 jan 2019 Commentaire »

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It will take a majority of the votes of the legislators so that Theresa May's unpopular Brexit agreement will be approved. If the document is rejected by 100 people, it will increase the risks, in particular, the risk of strengthening the opposition and early elections will increase, which will lead to a drop in the pound.

Nevertheless, the sterling in this situation has the opportunity to resist, since the market will follow the chances of the British prime minister to the second vote. This opinion is shared by global strategists surveyed by Bloomberg. The agency has published the views of the most experienced analysts on the likely outcome of a meaningful vote and the potential reaction of the pound.

Credit Agricole

If there are 100 votes or less against the agreement, this can lead to consolidation of sterling. With a greater number of votes against in conjunction with a vote of no confidence from the Labor Party, the pound may have to part with recent conquests. In the case of a loss of Theresa May with a margin of 100 or more votes, the pair GBP / USD will reach $ 1.25. Credit Agricole has a deal targeting $ 1.39 for half a year. Banking analysts are confident that the British pound will soon begin an uptrend.

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Mizuho Bank

The bank has little faith in the complete defeat of May, while allowing for this development. Over 220 votes against a pound fall to $ 1.2250. With a less significant margin of 20–100 votes, the sterling is likely to jump to $ 1.3350. If the project is rejected by 20 people, then the British currency is waiting for a rally with a potential yield of $ 1.35.

Danske Bank

The rejection of the draft agreement by 100 or more votes is already a negative for the pound. The bank does not believe that Teresa May will receive approval from Parliament. Further, "we will enter uncharted territory," experts wrote. Maybe anything: the second referendum, the second vote. The odds of the pair GBPUSD bank were in the range of $ 1.25– $ 1.30 until further clarification of the situation.

Rabobank

"Given that the EU does not show any signs and willingness to make concessions, May will probably need a loss with a slight margin in order, as the market thinks, to win the second round, perhaps less than 50 votes," experts write.

This can reassure a pound, which will rise to $ 1.30. Defeat by a margin of 200 votes will not allow the British prime minister to keep the lead. Labor's far-left government will put pressure on sterling, and GBP / USD risks falling to $ 1.15– $ 1.20.

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German economy – a new headache for the euro

Trading 15 jan 2019 Commentaire »

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The expected slowdown in the growth rate of the German economy hit the euro. The single European currency fell on concerns about a wider downturn in Europe. The region's largest economy is experiencing a cooling of the global economy and the effects of trade conflicts caused by the policies of US President Donald Trump.

The German economy grew by 1.5 percent in 2018, the lowest in five years. Soon after the release of GDP data, the euro fell to a five-day low of $ 1.1423. The first alarming "bell" for the euro was the unexpected drop in industrial production in Germany, which raised concerns about the ECB's plans to stop stimulating. There is an opinion that, although these figures are in line with expectations, the gloomy picture as a whole reinforces the doubts that the ECB will raise interest rates in general in 2019.

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In the short term, the biggest risk for Europe and the euro is the uncoordinated Brexit, which can occur at the most inappropriate moment for the German economy. For the same reason, it is necessary to closely monitor the sterling on the eve of a vote in parliament.

The dollar is growing and overall looks very attractive against this background, despite recent losses caused by fears of a global slowdown and expectations of a pause in the Fed's rate hike this year.

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Pound sterling pending an important vote on Brexit

Trading 15 jan 2019 Commentaire »

Today, British parliamentarians will need to make a decision that can determine the scenario for the United Kingdom's withdrawal from the European Union. The further dynamics of the British currency depend on the voting results in the House of Commons.

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The question of whether the country's Prime Minister Theresa May can get parliamentary approval for her bill on Brexit terms or not is still open.

The further dynamics of the British currency depend on the voting results in the House of Commons.

There are several options for the development of events.

1. Theresa May wins.

If the parliament approves the draft transaction promoted by the head of government, the pound will rise in price against the dollar, as a result of which, the GBP/USD pair will easily reach the level of 1.31 and then continue to rally to 1.35.

2. Theresa May will lose a minimum margin (50 or fewer votes).

This outcome is likely to signal that the position of the Prime Minister is not as weak as it is currently believed, and she has enough support in the government to try to push the deal again.

It is not excluded that Theresa May, herself, will consider this a victory and will continue negotiations with the EU on the mechanism of "bet stop".

In this case, the pound can strengthen to $1.30, but not more.

3. The head of the cabinet will lose by a large margin.

Losing 100 or more votes will be a serious challenge for Theresa May, and she will have to extend the 50th article of the Lisbon Treaty or withdraw Britain from the EU without a deal. Regardless of what the next steps of the Prime Minister will be, the defeat of May will provoke a sharp drop in the pound exchange rate, which will push the GBP/USD pair below 1.25. The further fate of the British currency will depend on how quickly the head of government announces a backup plan of action and how aggressively the opposition insists on holding early parliamentary elections or a repeat Brexit referendum.

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Theresa May: The Path to Calvary

Trading 15 jan 2019 Commentaire »

So, this day has come. The British Parliament will vote today whether it will support the agreement with the EU, concluded by Prime Minister Theresa May.

Experts promise a crushing defeat in May.

Is it possible that this will actually become a vote of no confidence in the May government?

- Yes, probably. How can the prime minister rule the country when the most important decision of the parliament failed?

Most likely, the failure of the agreement with the EU will lead to the resignation of the cabinet and to new elections quite possibly.

Furthermore, Britain's withdrawal from the EU will take place at the end of March 2019. And if the agreement is failed, there will be an exit without an agreement and this is very negative for the British economy.

Why do MP's vote against the agreement?

Part of it is because they are generally against the exit of Britain and the latter, it is because they believe that May is bending too far under the EU. Although my opinion is not at all like this - rather, the EU is too far towards Britain.

Voting is scheduled for 19.00 London time.

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BITCOIN Analysis for January 15, 2019

Trading 15 jan 2019 Commentaire »

Bitcoin managed to push higher above the $3,600 area after a certain bounce off the area from where the price is currently making a correction before pushing further upwards in the process. The price is currently held by 200 EMA as resistance while Kijun and 20 EMA are holding the price as support. The price movement above Kumo Cloud also indicates that the bullish pressure is quite stable now and may lead to further bullish momentum in the coming days. Though the trend is currently bearish, but having certain bullish engulfing momentum in the process, further upward momentum is expected as the price breaches above 200 EMA with a daily close. As the price remains above the $3,500-600 area, the impulsive bullish pressure is anticipated to continue in order to push the price higher towards the $4,000 area in the future.

SUPPORT: 3,000, 3,500, 3,600

RESISTANCE: 4,000, 4,250, 4,500

BIAS: BEARISH

MOMENTUM: VOLATILE

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How will a Brexit agreement vote affect oil?

Trading 15 jan 2019 Commentaire »

The oil market again demonstrates increased volatility as Brent quotes fluctuate in the range of $59- $60 per barrel. Two factors exert pressure on the oil rate today - the loss of investor interest in risky assets against the background of weak data on China's foreign trade, as well as the approximation of a vote in the British House of Commons on Brexit.

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As is known, Chinese economic statistics often serves as a leading indicator of future global economic recovery rates. Accordingly, the depressing data on the volume of imports (decreased by 7.6%) and exports (decreased by 4.4%) led to the emergence of new concerns about a slowdown in global growth.

Today we should pay attention to the results of the vote on the Brexit agreement in the British Parliament. The lack of a deal will lead to a decrease in Brent oil prices since Brexit without a deal could trigger a financial crisis in England, which will be another threat to global demand for hydrocarbons.

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Oil rollercoaster ride

Trading 15 jan 2019 Commentaire »

The week by January 11th turned out to be the best for black gold in the last six months. As a result, the North Sea variety expanded the correction to 20% of 18-month bottom levels but continues to trade 30% below the October highs. Factors such as the entry into force of the agreement between OPEC and other producing countries to reduce production by 1.2 million b/s, the uncertainty regarding the grace period for oil imports from Iran, the decline in US reserves and the number of drilling rigs from Backer Hughes from 888 to 873 favor the correction Brent and WTI. However, the problems of global demand periodically inspire bears to counterattacks.

Thus, Bloomberg experts unexpected the education in Chinese exports and imports in December became a catalyst for sales of black gold, reinforcing concerns about a slowdown in China's GDP. An Official in Beijing immediately issued a statement of readiness to stimulate the economy in the monetary and fiscal spheres. At the same time, a reduction in taxes and norms for deductions to the mandatory reserves fund, as well as an increase in infrastructure investments in 2018, should be felt soon. At least the OECD notes that the Chinese economy is likely to find its footing.

Looks pretty curious picture in the US, Bloomberg experts expect reserves to drop by 2.5 million b/d following the week by January 11. As a result of which, the figure may fall to its lowest level since November. If we add to this the problems with the increase in the number of drilling rigs, then it can be assumed that the US oil industry is working at the limit. However, Goldman Sachs notes that the "bullish" market allowed US producers of shale oil to add 0.86 million b / d from June to August. This is the best indicator for the entire history if we ignore the recovery periods after the hurricanes. If in the current conditions on the background of the correction of Brent and WTI, it will grow as fast, the rollback will not last long.

Excessive oversold of oil in the face of potential improvement in global demand, the problems of American producers and the reduction in OPEC production force speculators to get rid of short positions in the North Sea variety. At the end of the week by January 8, their value fell by 3.6%, which expanded the net longs to 158,146 futures and contracts options(+ 3.8%).

Dynamics of Brent and speculative positions

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It is possible that black gold will continue to ride the roller coaster, but the median forecast of the average price among more than 100 experts surveyed by Reuters for 2019 remained unchanged at $ 65 a barrel. By 2020, it has been lowered from $70 to $65. Last year it was about $ 70. Thus, economists expect that OPEC and Russia will manage to balance the black gold market.

Technically, after reaching the intermediate target of 78.6% for the "Shark" pattern, a regular rollback went in the direction of 23.6%, 38.2% and 50% of the CD wave. If the bulls manage to keep Brent quotes above $ 58.7 per barrel, the risks of a correction to a downtrend will increase.

Brent daily chart

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EUR / USD pair: plan for the American session on January 15. Weak data on the euro area led to the fall of the euro

Trading 15 jan 2019 Commentaire »

To open long positions on EUR / USD pair, you need:

In the first half of the day, a report was released on the Eurozone's foreign trade surplus, which r amounted to only 19.0 billion euros in November last year against 23.4 billion euros in November 2017, which put pressure on the euro. Currently, buyers are required to return to the resistance level of 1.1440, above which we can expect a larger upward trend in the area of 1.1472, where I recommend taking profits. If the pressure on the euro continues further, it is best to consider new long positions after updating the minima of 1.1407 and 1.1378.

To open short positions on EUR / USD pair, you need:

Bears coped with the task for the first half of the day. Currently, only an unsuccessful consolidation and a return below the resistance level of 1.1440 can lead to a further decline in the European currency in the area of the minimums of 1.1407 and 1.1378, where I recommend taking profits. Weak data on the producer price index in the US may lead to a larger upward correction in the area of 1.1472, where you can open short positions in EUR/USD pair to immediately rebound.

Indicator signals:

Moving averages

Trade is conducted below the 30- and 50-moving averages, which indicates that the downward trend in the market continues.

Bollinger bands

The volatility of the Bollinger Bands indicator has dropped, which does not give signals to enter the market.

More in the video forecast for January 15

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Description of indicators

MA (moving average) 50 days - yellow

MA (moving average) 30 days - green

MACD: fast EMA 12, slow EMA 26, SMA 9

Bollinger Bands 20

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EUR/USD analysis for January 15, 2019

Trading 15 jan 2019 Commentaire »

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Recently, the EUR/USD pair has been trading downwards. The price tested the level of 1.1418. According to the H4 time – frame, I have found a finished expanded flat bullish correction phase, which is a sign that downward movement can resume. My advice is to watch for selling opportunities. The downward target is set at the price of 1.1315. EUR/USD is overall still in a big consolidation phase.

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Simplified wave analysis of EUR / GBP for January 15

Trading 15 jan 2019 Commentaire »

Large-scale graphics:

Since mid-April last year, the price of the cross forms a rising wave. The last wave of the scale H4 gave rise to the final segment (C).

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Medium scale graphics:

From December 10, the price forms a flat wave in the form of an expanding triangle. In a larger wave, it takes the place of correction (B).

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Small -scale graphics:

On January 3, launched a downward wave zigzag. The wave structure looks complete. The upper limit of the calculated target zone has been reached, but no turn signals are observed.

Forecast and recommendations:

In the upcoming weekly period, there is a high probability that the current flat will be completed and the movement vector will change. In the area of calculated support, it is recommended to track reversal signals in order to search for entry into long positions by the pair.

Resistance zones:

- 0.9030 / 0.9080

Support areas:

- 0.8870 / 0.8820

Explanations for the figures: The simplified wave analysis uses waves consisting of 3 parts (A – B – C). For analysis, 3 consecutive graphs are used. Each of them analyzes the last, incomplete wave. Zones show calculated areas with the highest probability of reversal. The arrows indicate the wave marking by the method used by the author. The solid background shows the formed structure, the dotted - the expected movement.

Attention: The wave algorithm does not take into account the duration of tool movements over time. To conduct a trade transaction, you need confirmation signals from the trading systems you use!

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