Most of the news coming from the UK next week. On Tuesday, it will be data on unemployment and average wage changes for August, on Wednesday – the consumer price index for September, on Thursday – retail sales and the European Union summit on Brexit starts. In addition, the United States will receive information on retail sales for September. However, despite the importance of future reports, the main attention of traders will be focused on Brexit, on the EU summit and on any information from Boris Johnson, Donald Tusk, Jean Claude Juncker, Michel Barnier, Angela Merkel, Emmanuel Macron. It is these actors who most often speak out about the promotion of the Brexit negotiation process and have the greatest influence on it. Regarding the chances of fulfilling one or another Brexit option, traders are advised not to try to guess the future. Brexit has repeatedly shown to all market participants that trying to predict how everything will end is an ungrateful affair. The growth of the pound was often associated with “pure water” rumors and unfounded market expectations, which each time gave way to a stronger fall in the British currency. That is why the movement of the pound / dollar pair this week may well be illogical and consistent with the nature of the incoming news. Thus, next week, when trading the GBPUSD pair, special care must be taken. As for the EURUSD pair, one of the important events is the report on the change in industrial production in August on Monday, and the inflation report for September on Wednesday. The greatest interest, of course, will be caused by the consumer price index, which in recent months has fallen to absolute lows. A value below 1.0% will no longer be considered just low, but critical. And then it can be expected from the ECB and a new reduction in key rates, the quantitative stimulus program in the first months of its operation is unlikely to be changed, but it can be expanded in the future. And for the euro, these are all potential bearish factors. In confrontation with the dollar, the euro has very few trump cards. And the main factor behind the growth of the euro at the moment is simply the technical need to adjust from time to time. There is no positive news from the EU. In the USA, recently, not everything is good either, but America’s economy is still stronger, macroeconomic indicators are higher, monetary policy is tougher. It is these factors that continue to play for the dollar.
Political events associated with the weakening of the US economy are beginning to control market trends. The main one is that the US Congress will begin hearings on the impeachment of the President.
Signs of a weakening US economy and favorable forecasts for the expected events of the end of the week may contribute to a weakening dollar and the growth of other currencies, especially European ones. It is likely that medium-term support and resistance lines will be identified along them. The rollback or breakthrough of these levels depends on the attitude of the European Union towards the “soft” Brexit plan and on the meeting of the Vice Prime Minister of the PRC with White House officials in Washington.
For the British pound, bad news. Recently, the British currency has often risen in price solely on the positive expectations of market participants regarding Brexit. It was assumed that the parties would conclude an agreement and disperse in a friendly manner. Each message that hinted at such a completion of the process was actively accompanied by purchases of the pound. But in 100% of cases, these messages were then not confirmed by the facts and real actions of the parties, and the pound very quickly returned to its original position and updated the lows. Now we can witness something like that. Yes, the “hard” Brexit seems to be delayed. Yes, it seems that the parties agreed to postpone the date. But what does it give? There is additional time that Boris Johnson will spend on finding workarounds for implementing the “hard” Brexit. But the lack of a favorable fundamental background can reverse the movement of the pound and provoke its new fall.
US authorities have decided since Friday, September 20, to exempt from duties 437 goods imported from China. Market participants almost always positively perceive any news on the topic of a trade war with China, clearly interpreting them in favor of the American currency. And even the fact that the Fed still seems to have embarked on a systematic easing of monetary policy has not yet exerted proper pressure on the dollar. Therefore, the dollar will tend to grow in the coming week, putting pressure on other currencies.
The optimization of the parameters of the robot Gap and Trail. Optimization was performed for the Alpari broker, Standard account, and for IC Markets broker, Raw Spread account. Set files were received from 2019.09.08 with optimal parameters for the following currency pairs: AUDUSD, EURUSD, GBPUSD, USDCAD. Users are encouraged to use the new set files. Also, instead of the GBPJPY currency pair, it is recommended to use USDCAD.
Oil is falling. The tendency to fall will intensify, as a third wave has formed down. It is clearly visible on the daily timeframe. The immediate support is likely to be the level of $ 50.5. The price should approach this level approximately by August 20-23.
Also in the coming week, the formation of local reversal levels with small price movements against the main trend is possible. This applies to the oil, gold and major currencies markets on the Forex. The reason for this phenomenon is the lack of new incentives after the formation of trends in early August. Therefore, traders will seek to fix part of the profit, which will reduce the dynamics of directed activity of price movements.