News background & trading ideas for 04/03/2019

The ending of last week took us by surprise. Mainly it is about clearance sales of gold. Not about that something unbelievable happened: from a technical point of view, gold sank to basic support and tried to take it by storm – so, it is a quite common thing. He case is that, there are no significant reasons for this. The ISM index of business activity in the US manufacturing industry sank to its lowest level in the last two years, therefore, it is not a reason for selling gold.
We have repeatedly noted that in our understanding the 1295 +/- mark is a kind of separating of forces in the gold market. So, while we don’t have any confidence in reaching this level, we believe that the points for buying are just perfect: with minimum stops, you can count on maximum profit.
Getting back to Brexit crunch meeting dissociation over the last week, we would like to note that Brexit failed again. It is about delaying the votes on Plan B. Theresa May was given time to its finalization.
As a result, the pound was in perfect shape, by the end of the week. People realized that the U.K. will not leave the European Union with no deal. It was a positive sign for the British currency. As for the decline on Friday, it was more likely profit taking than breaking down of background. Fed Chairman Powell has been acting in Congress for a week. However, we didn’t get any new information from him. It finally became clear that raising the rates in doubt. So, monetary policy is paused until clarification.


The previous week was relatively calm in terms of macroeconomic statistics. But the current one promises to be over-saturated. Read out run-down of the latest events: the announcement of the decision of the Reserve Bank of Australia (Tuesday), the Bank of Canada (Wednesday), the ECB (Thursday), and data on the US labor market will be completed on Friday. And this is not counting all sorts of macroeconomic statistics (on the labor market of Canada, GDP in the Eurozone and Australia, business activity in the USA, etc.). So, it will not be boring. We will closely follow foreign affairs and keep up to date.


Our preferences in trading, they might change this week. We are still buying gold, but movement below the 1290 will be a sign for us that it’s time to change trading technique. We continue to buy oil and the pound on the intraday basis. Despite the extremely weak data on Canada's GDP, published on Friday, but today we are trying to sell USDCAD.

As usual, we sell the Russian ruble in the intraday, medium and long-term directions. In general, we tend to sell the dollar in the foreign exchange market. Except USDJPY, which we will buy on descents within the day.