Waiting for Jackson Hole, riot in Britain and ruble problems

20 Agu 2019

We have already noted that this week promises to be calm but The Jackson Hole Economic Symposium is an annual symposium, traditionally gathering representatives of all the leading Central banks in the world, might give enough reasons for bursts of volatility.

The most vulnerable are the euro and the dollar. Weak inflation in the Eurozone (yesterday's report showed that consumer inflation in the Eurozone fell by 0.5%), So the euro is definitely in danger.

As for the dollar, Powell's performance is scheduled for Friday expecting from him a hint to the next Fed rate cut in September. It will be a hit to the dollar. We consider the current dollar growth an excellent opportunity for its sales.

Meanwhile, in Britain, a statement by opposition leader Jeremy Corbyn that he promises to take any action just to prevent an exit without a deal is gaining momentum. As a result, the issue of early parliamentary elections is being increasingly discussed in the media. And although in any other situation we would say that this is a negative sign for the pound, in this particular case, early elections are more likely positive, since they reduce the likelihood of a “no-deal” Brexit, therefore this is the reason for the pound to grow. So the descent of the pound paired with the dollar of 1.21 is a good opportunity for the pair to buy: both on the intraday basis and medium-term positions.

Given that there is a chance that the pound value might growth this week, and the euro, on the contrary, a decline, it makes sense to pay attention to the sales of the EURGBP. This can be done simply from current prices.

Another promising deal continues to be sales of the Russian ruble. And although it has already lost quite a lot of its value, the potential for its decline is far from being exhausted. Argentina scared investors around the world and showed how it could be dangerous to invest in risky assets. So the already “toxic” ruble has become even less desirable. In this regard, recall our recommendation to buy USDRUB. We advised buying it when the pair fluctuated around 63, but even now the pair’s purchases do not look hopeless.

Total, today we will sell the dollar primarily against the pound and the Japanese yen. Also, we will sell EURGBP, as well as the Russian ruble. Gold continues to be an extremely interesting asset for short-term speculative trading. In the current uncertainty, we choose the tactics of oscillatory trading without obvious preferences, that is, we buy in the oversold zone and sell in the overbought zone (as a guideline, it is quite possible to use classic RSI oscillators or more advanced versions of oscillators developed by our experts for a deeper analysis of the price dynamics).