News background and trading ideas for 11/10/2018

Let's start the review with an analysis of the Tuesday events. We noted that the release of UK data would almost certainly provoke a rise in pound pairs volatility and recommended buying a pound even in case of weak data, noting that in that point, you need to wait for sales to subside. The data is not the best (GDP is worse than forecasts, as the producing in the manufacturing industry. Concerning the trade balance, it came out with a significant deficit, but really in predictions). In the end, everything happened, as we predicted. The pound threw two black hourly candles, and after that followed the steady currency appreciations.
This growth is adequately explained by our basic idea, which we have been running for more than a month already (an incorrect assessment of the outcome of the Brexit negotiations by markets). We received another confirmation not only in the form of the actual dynamics of the pound but also in the information field. European Commission President Jacques-Claude Juncker expressed confidence that the parties will be able to agree.
On this occasion, we can not miss the executive director of London-based hedge fund Eurizon SLJ Capital quote: “The chances for a tough Brexit, exit without a deal are meager, and the deal will happen in the coming weeks, which is likely to provoke a pound rally.” Sterling is very undervalued and oversold. It is still reasonable to treat 1.55 as a truly fair value. ” So, we continue to recommend looking for points for purchases pound.
Among other events, it should be noted Trump’s further attacks on the Fed, who criticized the Central Bank for the too rapid rate hikes and said that he is a supporter of low interest rates. The dollar suffered losses as a result and was forced to defend itself. In this regard, today's data on consumer inflation in the US look extremely important. Very likely they will determine the dynamics of the dollar until the end of the week. Recall that inflation growth is a signal for dollar purchases. If the data come out below forecasts, it may well be followed sales of the US currency.
However, the dollar has a few new problems. In particular, yesterday's sales in the US stock market. Let’s remind that the bubble is pretty severe there and if it decides to break the consequences will be very serious.

Hurricane Michael continues to gain momentum. However, even a 40% reduction in oil production in the Gulf of Mexico could not support the oil quotes, which continued to crumble. Pressure on oil increased data on oil reserves in the US from the API, which showed their growth by almost 10 million barrels. Recall, we recommend its medium and long-term sales.

We advised selling the Russian ruble either. The latest news in favor of this is the record exodus of foreign investors from the Russian stock market since March 2017. As well as a sharp increase in total capital outflow from the country (according to the Central Bank of the Russian Federation, the outflow of capital from the Russian Federation reached $ 31.9 billion in the first three quarters of this year against $ 13.7 billion for the same period of 2017). So we are looking for points for sales of the ruble.