News background and trading ideas for 23/11/2018

23 Nov 2018

Yesterday was a day off in the USA, so it was pretty quiet in most pairs, but not in all. The British pound, as usual, was the central troublemaker. Literally, in half an hour, it managed to climb by almost 150 points. The reason, unquestionably, was the same one - news from Brexit fields. Unless recently news had negative connotations (from the markets point of view), than yesterday information that the UK and the European Union will ensure free trade after Brexit and are determined to resolve an issue with Ireland border, as well as the news that the European Commission approved a political declaration on new relations between the EU and the UK, provoked a sharp increase in optimism about the outcome of Brexit.

We recommend buying the pound for months, and in the light of such news just established in our position. Recall that in the current increased uncertainty, we use the following trading strategy: keep half of the volume of purchases in the form of a medium-term position with targets up to 1.41-1.43, but to use part of the position to catch volatility bursts like the one we saw yesterday. That is, to buy a pound from intraday lows with the closing of the position upon reaching 100-150 points of profit. And to do so on an ongoing basis, until there is an ultimate certainty with Brexit.

Another forward-looking trading idea, particularly interesting today is the sale of the pair USDCAD. The fact is that today a very substantial block of statistics on Canada will be published, which includes statistics on consumer inflation, as well as retail sales in the country. Considering that the pair could not storm the upper limit of the medium-term range (1.33) and has already started a downward movement, the obvious goal of which is the lower limit of the range (1.28) today's data may well give the necessary impetus and finally dispel traders' doubts about the direction of movement in a pair.

So, we recommend selling a pair USDCAD with targets around 1.30 (conservative) or 1.28 (optimistic scenario). Set stops above 1.3330. In the case of the increase of the pair and not failure data, you can add about 1.33 to sales. Another motivation for selling the pair is the potential difficulties of the dollar due to the aggravation of the situation with migrants and the promulgation of Trump's order to close the border between the US and Mexico and allowing the military to open fire on illegal immigrants.

Other our trading ideas are unchanged: mid-term sales of oil and the Russian ruble, as well as intraday gold purchases.