Trading Plan – Mon 16 Dec: Normal service resumes with a busy week for GBP on the economic calendar

Mark NugentDec 2019, Trading Plan

Trading Plan – Mon 16 Dec: Normal service resumes with a busy week for GBP on the economic calendar

Last Week

The major trading opportunities were delivered by the UK general election. The GBP rose going into the election and saw a further boost when the exit pools made it clear that there would be a significant Conservative majority even after normal polling errors. Things were a bit choppier for the FTSE250 which closed up on the Thursday (election day). On the Friday open there was a predictable gap up and a move up which was very tradable after initial volatility.

In other news, the Fed kept rates unchanged and was seen as being dovish by placing a high bar on any future rate hikes.

At the ECB, Christine Lagarde was seen as being dovish as she stuck to Draghi’s script, at least for the time being.

The week ended with the announcement of a US/China phase 1 trade deal, to be signed in early January. Reaction was muted as this was widely expected (for year-end political reasons) and also because it all felt a bit manufactured.

Global equity indices were up over the week. There was little movement in WTI and GOLD.

On currencies, the GBP was significantly up, the EUR took a breather from its decline and the USD and JPY were both down on mildly positive risk sentiment. Commodity currencies were flat or slightly up.

This Week

It’s the last week of the year and I won’t be looking too hard for trades in what could be a quiet time in the markets. Nonetheless, there were signs of a reversal in the GBP and FTSE250 towards the Friday close so there may be opportunities to trade any continuation of that reversal, particularly if the economic calendar facilitates any downwards move.

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