Trading Plan for 12/18/2018

Although inflation in Europe slowed from 2.2% to 1.9%, while waiting for a decline of only 2.0%, which showed a preliminary estimate, the single European currency could even strengthen. This is largely due to concerns about the upcoming meeting of the Federal Commission on Open Market Operations, the results of which will be announced tomorrow evening. Indeed, many people are really worried that the Federal Reserve will reduce the pace of increase in the refinancing rate, and perhaps even leave it unchanged. And the trouble is that many have already put in the value of the dollar raising the refinancing rate to 3.25% at the end of next year. Revising the Fed's plans will force investors to reconsider their positions. Moreover, the slowdown in inflation in Europe only confirmed Mario Draghi's words that the European Central Bank will not rush to tighten monetary policy. So the decline in inflation scared few people. Interestingly, the pound did not follow the example of the single European currency and remained almost unchanged. Once again, the reason lies in internal political squabbles, as now the Labour party are going to initiate a vote on a vote of confidence to the prime minister. Of course, many people understand that this initiative will not be crowned with success, but it has done a lot of hype, which had a negative effect on the pound.

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Today, investors will remain cautious, since quite a lot is at stake. More recently, no one doubted that the Fed would raise the refinancing rate in December, and three more in the coming year, bringing it to 3.25%. This is reflected in the purchase of interest rate futures by the Fed, and if something goes wrong tomorrow, a massive sale of these contracts will begin, followed by a flight from the dollar. Even if the rate is raised, but the rates of increase for the next year are revised, investors will have to reconsider their investments, and the result for the dollar will be negative. But no one has clarity on these issues, so it is better to take a wait-and-see attitude.

The euro/dollar currency pair has returned to the lateral movement framework of 1.1300/1.1440, where it has since become closer with a 50% deviation of 1.1360. Probably assume that the turbulence within the current values, forming a low amplitude 30-40 p.

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The pound/dollar currency pair once again hovered within the periodic level of 1.2620, forming a slowdown later. Probably to preserve ambiguous fluctuations within the level of 1.2620.

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