Snooze Ville in FOREX, pound’s immunity and China gives hope

15 Apr 2019

In general, the previous week was relatively calm. As a result, the volatility index of exchange rates, which is calculated by the investment bank JP Morgan, fell to its new minimum since 2014. For instance EURUSD. Since the beginning of 2019(that is already 3.5 months), it has been fluctuating in a range of width less than 400 points (such a range a pair could pass in 3-4 days even without any volatility explosions).

The most likely contenders for the “role” of irritant can only note the start of a full-fledged trade war between the US and the EU.

The main event of the week was another Brexit postponement. In general, the word “another” has already become a prefix to Brexit: the next voting in Parliament, the next failure of May’s plan, the next negotiations, etc. The main result of the appearance of this “prefix” was the development of immunity in pounds for information regarding Brexit. The GBPUSD dynamics of last week is proof of that. Actually, we can hardly expect any breakthroughs this week, that means that the pound will continue to fluctuate without a clear direction. This should be used for active trading with no clear preference, buying a pound on descents and selling after local growth.

Among other events, it is worth noting the publication of the Fed's minutes, as well as the announcement of the results of the ECB meeting (again, nothing new and unexpected).

It is worth paying attention to the block of key data on the Chinese economy (GDP and industrial production). After the next drop in forecasts of the pace of economic development by the IMF, the markets would be very happy to see a positive trend in the economic development of the world economy.

In general, there are reasons for optimism. On Friday, data on China’s trade balance were published, which showed an extreme rise in China’s exports. In addition, a sharp increase in loans showed that measures to stimulate the economy in China seem to be yielding results.

In terms of trading preferences, we start approximately the same as we ended the previous one: we will continue to look for points for selling the dollar in the foreign exchange market (except USDJPY, we are buying it), buying gold and oil in the commodity markets, besides continue to sell the Russian ruble.