Morning Comments

16 November 2018/7:09 a.m. ET

In an effort to get re-oriented to this market, we will be posting technical analysis for all the major pairs today along with commentary (there will be no Daily FX Report; it will resume Monday, and Key Market Strategies will be delivered tomorrow morning). 

As indicated in the note with the euro chart this morning posted at the blog, we are still working from the premise the US dollar is in a trend move higher despite the dithering and are targeting up toward 100 or more on the next thrust (we will post that setup). 

Of course, the big news is the so-called preliminary Brexit deal, which Prime Minister May will attempt to push through the UK parliament.  As you know, we are no fans of the EU and were actually hoping for a hard Brexit, as we believe the future of the UK would be much better off (politically, socially, and economically) completely unhinged from the apparatchiks who run the EU regulatory madness complex.

We have serious doubts PM May will last much longer. Already we have seen a number of ministers resign.  Though getting rid of what see as a feckless May will likely be good for the UK in the longer term, we should expect the pound will suffer near-term.  And of course, the Financial Times and other lefty financial publications who favor globalism, will likely trumpet how terrible a break-away UK will be for everyone.  Something like the “death of first-born UK males” from here on out because the UK dumped the EU can be expected. The vitriol and fear-mongering from the FT and others during the Brexit referendum was a sight to behold; a complete embarrassment for people who ware supposed to understand economics. 

Anyway, we are looking for the pound to work lower (and possibly plunge) as the setup indicates in our Wave analysis.  So, from a trading perspective you may wish to consider positioning short, piece by piece, or entry’s as swing lows, in hopes (expectation) of a big break on May’s resignation.  (We will post the updated daily wave chart for the pound.)

We added long USD/ZAR this morning.  The setup looks excellent and as a trader you must take your setups defined by your edge. 

We still owe you the correlation analysis.  And should have that to you today. 

We’ve been chopped to pieces with our trade ideas so far this month.  But plenty of time to recover for the month, if we do our job right. 

Thank you.