News background & trading ideas for 06/03/2019

The Reserve Bank of Australia did not introduce changes in monetary policy. Consequently, we did not observe any significant reaction of the pairs with the Australian dollar. However, today, after the publication of week data on Australia`s GDP, against the background of previous even weaker data, the Australian dollar could not stand it and fell down. Considering the current fundamental background (week macroeconomic data and rumors about a possible reduction in rates), negative sentiment in the market and today`s breakdown of important support around 0.7050, so selling AUDUSD is a fairly good idea.

In terms of the Central banks, we cannot but recall today`s session of the Bank of Canada and the announcement of its results. Surprise are not expected on the market: the rate remains unchanged. So, regardless of the decision of the Central Bank, the dynamics will develop. Our position is still unchanged: this week we are looking for points for buying the Canadian dollar. Accordingly, we encourage to sell USDCAD on the intraday basis and set small stops.

With no satisfaction we continue to keep close track on the painful demolition of analysts' attitudes about Brexit. We recall, again, that the UK will not leave the EU with “ no-deal”. And according to information released by Bloomberg, the leading analysts have realized that just now. At least, the results of the last survey of the 16 leading banks are showing that they estimate the probability of exit “without no deal” at only 9%. At the same time, the majority is inclined to postponement of Brexit date. For the pound, of course, this is a positive sign. Our position has not changed since September - we recommend using any pound reduction for its buying on the intraday basis and in the medium-term opportunities. This week's pound decline is the result of a lack of progress in the current negotiation process. However, negotiations are in progress so the situation might change at any time.
Another our medium and long-term positions for selling the Russian ruble. In this light, we cannot fail to note the information from Bloomberg website. Investors have withdrawn the maximum amount of funds ( since October 8, 2018) from the largest exchange-based fund focused on the Russian stock market earlier in the week. We have already noted that the Barings Vostok case cannot but become a negative factor. That is the actual confirmation.

The National People's Congress has begun in China. Where some details of the tax reform were announced. This is a tax mitigation totaling up to $ 300 billion. Tax reform should stimulate economic activity in the country and break the current trend of slowing economic growth, which have already reached the lowest marks over the last 30 years.
The most memorable of yesterday’s news, it is worth noting, the relatively good figures of retail sales in the European area + 1.3% m / m (in accordance with the forecast), which had no positive effect on euro at all. The EURUSD is storming the lower limit of the medium-term range. We see this as a good opportunity to buy a pair with small stops and relatively good profits.

With no satisfaction we continue to keep close track on the painful demolition of analysts' attitudes about Brexit. We recall, again, that the UK will not leave the EU with “ no-deal”. And according to information released by Bloomberg, the leading analysts have realized that just now. At least, the results of the last survey of the 16 leading banks are showing that they estimate the probability of exit “without no deal” at only 9%. At the same time, the majority is inclined to postponement of Brexit date. For the pound, of course, this is a positive sign. Our position has not changed since September - we recommend using any pound reduction for its buying on the intraday basis and in the medium-term opportunities. This week's pound decline is the result of a lack of progress in the current negotiation process. However, negotiations are in progress so the situation might change at any time.

Another our medium and long-term positions for selling the Russian ruble. In this light, we cannot fail to note the information from Bloomberg website. Investors have withdrawn the maximum amount of funds ( since October 8, 2018) from the largest exchange-based fund focused on the Russian stock market earlier in the week. We have already noted that the Barings Vostok case cannot but become a negative factor. That is the actual confirmation.

The National People's Congress has begun in China. Where some details of the tax reform were announced. This is a tax mitigation totaling up to $ 300 billion. Tax reform should stimulate economic activity in the country and break the current trend of slowing economic growth, which have already reached the lowest marks over the last 30 years.
The most memorable of yesterday’s news, it is worth noting, the relatively good figures of retail sales in the European area + 1.3% m / m (in accordance with the forecast), which had no positive effect on euro at all. The EURUSD is storming the lower limit of the medium-term range. We see this as a good opportunity to buy a pair with small stops and relatively good profits.