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16.10.2018 04:07 PM
Trading Plan for 10/16/2018

The dollar should say a big thank you to the British House of Commons, in which yesterday, Theresa May was ridiculed, who gave a report on the negotiations with the European Union. According to her, the parties have already reached agreement on the main issues and only minor details are left to be resolved. This is what caused the laughter of parliamentarians, since one of these minor issues is the border between Northern Ireland and Ireland. If a free trade zone remains between them, the UK is deprived of the opportunity to independently conclude trade agreements with third countries, in violation of the rules and regulations of the European Union. That is the main purpose of Brexit, independence in the signing of trade agreements, in fact, remains unrealizable.

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Only this allowed the dollar not to collapse, since the American statistics was simply terrifying. Not only that commercial inventory increased by another 0.5%, so they have been growing for ten months in a row. Also, the growth rate of retail sales fell sharply from 6.5% to 4.7%. And all this against the background of a slowdown in inflation, which causes more and more concerns about the Fed's policy. The likelihood of revising the rate of increase in the refinancing rate is becoming more and more real.

Today, we should pay serious attention to the data on the labor market in the UK, where there is only one point that can be called positive, the unemployment rate itself. It must remain unchanged. But the number of applications for unemployment benefits may increase from 8.7 thousand to 10.0 thousand. Moreover, the growth rate of average wages without taking into account bonuses should slow down from 2.9% to 2.8%, and taking into account bonuses from 2.6% to 2.4%. So, the picture is pretty sad. In turn, in the United States, there are data on industrial production, the growth rate of which, according to the latest forecasts, may still increase from 4.9% to 5.0%. Also, capacity utilization may increase from 78.1% to 78.2%. However, the number of open vacancies has all chances to be reduced from 6,939 thousand to 6,900 thousand. But the growth of industry will raise the mood of investors.

The euro / dollar currency pair, moving closer to a maximum on Friday of 1.1609, felt a periodic resistance over itself, rolling back the quote. It is likely to assume the bumpkin within 1.1550 / 1.1590, being in the phase of rollback.

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The currency pair pound / dollar for yesterday closed the gap, where then went into a slight stagnation. It is likely to assume the restoration of short positions, practicing a gap in the downward direction of 1.3100.

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Mark Bom,
Analytical expert of InstaForex
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