Top Trade Idea 2020: Global Recession? Take a Under: Long Crude Oil, Long CAD/JPY

One of a many renouned calls in a second half of 2019 was that a tellurian economy, led by a US, was relocating towards a recession. The culprit? None other than a US-China trade war. And for some time, there might have been good reason: one of a many arguable retrogression indicators, a US Treasury produce bend inversion, was flashing red.

Yet as a calendar turns to 2020, all those retrogression calls seem overblown. The US economy looks like it will tighten 2019 with an annualized expansion rate around 2%. Global PMIs started to miscarry by a finish of a year, as did industrial prolongation and production information from G10 economies. Major executive banks are relaxation or changeable to neutral interjection to parsimonious labor markets, nonetheless tame acceleration will keep behind any poignant efforts to shorten financial process (see: Fed Chair Jerome Powell’s Dec 2019 press conference).

For 2019, during slightest a initial few months, it seems that a ‘reflation’ trade might be behind on: that is, ‘long growth.’ Crude oil is a commodity marketplace substitute for growth, while CAD/JPY rates offer as an FX substitute to wanton oil.

Crude Oil Price Technical Analysis: Daily Chart (October 2018 to Dec 2019) (Chart 1)

Crude Oil Price Chart

Top Trading Opportunities in 2019
Top Trading Opportunities in 2019

— Written by Christopher Vecchio, CFA, Senior Currency Strategist

To hit Christopher Vecchio, e-mail during cvecchio@dailyfx.com

Follow him on Twitter during @CVecchioFX

Top Trade Idea 2020: Long Equities and USD/SEK, Then Short AUD/JPY on Political Risk

In 2020’s adolescence, markets competence continue to glory on fragile confidence of improving fundamentals and US-China trade relations, though that competence spin green as a year progresses. Furthermore, a US presidential choosing will expected start to impact markets some-more if polls uncover Mr. Trump has a possibility during re-election, opening a doorway to some-more trade fight risks. There is also still a emanate of EU-US trade issues and how brewing tragedy in Iran competence impact that relationship.

Top Trading Opportunities in 2019
Top Trading Opportunities in 2019

— Written by Dimitri Zabelin, Jr Currency Analyst for DailyFX.com

To hit Dimitri, use a comments territory next or @ZabelinDimitri on Twitter

US Dollar Gyrates after Consumer Confidence Miss

Consumer Confidence – Talking Points

  • Consumer Confidence declined to 126.5 for Dec with a prior month being revised adult to 126.8
  • The recover on consumer certainty was preempted by news on a US-China trade front where President Trump settled that ‘phase-one’ of a rarely approaching trade understanding would be sealed Jan 15th during a White House
  • The benefaction conditions index increasing to 170.0 on upbeat labor marketplace conditions, though a short-term opinion decreased as consumers worry about their income prospects

The US Dollar is trade behind nearby it’s overnight lows after an ceiling pierce spurred by news on a trade fight front quickly sent a dollar aloft in a early morning hours. The USD was trade during a 96.49 symbol before relocating reduce as a consumer certainty figure from a Conference Board showed a decrease for December, entrance in during 126.5, down from 126.8 in a prior month.

The benefaction conditions index, that is formed on consumers’ comment on stream labor marketplace conditions and stream business conditions increasing to 170.0 from 166.6. However, a expectations index, that is formed on a short-term opinion for income and labor marketplace conditions decreased from 100.3 in Nov to 97.4 for this December.

US Dollar Basket (DXY) Price Chart – 3 Minute Time Frame

DXY 3-Min Chart

While marketplace participants sojourn keenly focused on trade fight headlines, view and certainty indicators for a US should start to pierce some-more into concentration as tensions between China and a US continue to ease. So far, markets have weathered several headwinds in 2019, though as we pierce into a year forward there are several distinguished threats that could poise risks to a markets.

Emplyment Trends vs NFP Conference Board

Even as a US labor marketplace continues to uncover strength, concerns around a labor marketplace are starting to manifest. The commission of consumers awaiting some-more jobs for a months forward decreased from 16.5% to 15.3% in a consult and those awaiting a arise in their short-term income decreased to 21.1% from 22.9%. The Dec Non-farm payrolls news is set to recover on Jan 10th with 266k jobs approaching to be added.

–Written by Thomas Westwater, Intern Analyst for DailyFX.com

Contact and follow Thomas on Twitter @FxWestwater

DailyFX forecasts on a accumulation of currencies such as a US Dollar or the Euro are accessible from a DailyFX Trading Guides page. If you’re looking to urge your trade approach, check out Traits of Successful Traders. And if you’re looking for an rudimentary authority to a Forex market, check out the New to FX Guide.

Top Trade Idea 2020: Short EUR/GBP – Sterling to Rise as Brexit Uncertainty Fades After UK Election

The choosing of a transparent infancy supervision in a UK after years of Brexit deadlock won’t make all a nation’s estimable mercantile and amicable problems disappear yet it does mislay doubt as to what a British Brexit process will be. This is expected to see abroad investment lapse to Sterling. Prime Minister Boris Johnson could be a propitious male with a numbers too, with his feat entrance as most of Europe, and particularly Germany, battles with a noted mercantile slowdown. Whatever a tongue from Brussels, European Union member states won’t wish to remove such a pivotal patron as a UK during a time when trade disputes with both China and a US are already casting clouds over other pivotal trade markets.

Given that a UK will singly start trade-deal traffic from a position of full correspondence with EU rules, a understanding could be done comparatively fast even as a UK branches out to try deals with other nations such as Japan, a US and Australia. With Brexit doubt gone, and a UK some-more expected than ever to get what it wants out of negotiations with a EU- a estimable trade understanding and regulatory autonomy- this looks like a good time to stay prolonged of argent even though, of course, a tactful highway is expected to get rough during times.

Top Trading Opportunities in 2019
Top Trading Opportunities in 2019

— Written by David Cottle, DailyFX Research

Follow David on Twitter@DavidCottleFX or use a Comments territory next to get in touch!

Top Trade Idea 2020: Long EUR/JPY – Chart Suggests a Bullish Set-up in a Making

My forex-pair to watch for a longer-term set-up in 2020 is prolonged EUR/JPY with a charts now suggesting that a complicated sell-off instituted during a start of 2018 is finally violation down.

While a Japanese Yen continues to advantage from a risk-off standing as a US-China trade fight rumbles on, it is expected that a fortitude – or even part-resolution – to this will be found early 2020 with conjunction side benefitting from trade tariffs, whatever they say. This will break JPY.

EUR/JPY Weekly Price Chart (February 2017 – 11, Dec 2019) (Chart 1)

EURJPY Weekly Price Chart

On a left-hand side of a pair, a Euro is now in a hands of a new ECB President, Christine Lagarde, who has already let it be famous that mercantile process should start replacing a stream lax financial policy.

Top Trading Opportunities in 2019
Top Trading Opportunities in 2019

Australian Dollar Forecast: AUD/USD Surges, though Rally Looks Overdone

Australian Dollar Forecast:

  • The Australian Dollar was a slouch in 2019 as negligence tellurian expansion and a US-China trade fight pressured a pro-risk currency
  • Now, a new turnaround in risk ardour has sent AUD/USD mountainous off October’s lows
  • Will a trade understanding signing send a Australian Dollar aloft still, or is it a box of “buy a rumor, sell a news?”

Australian Dollar Forecast: AUD/USD Surges, though Rally Looks Overdone

The Australian Dollar suffered opposite many vital currencies in 2019 as a US-China trade fight weighed on a Aussie’s performance. Recently, however, the proclamation of a “Phase One” trade deal regenerated a currency’s opinion and AUD/USD has been a vital champion – surging from October’s lows and trenchant several levels of technical resistance.

australian dollar opening in 2019

AUD Performance in 2019. Source: TradingView

After President Trump announced a United States and China will accommodate to pointer a understanding on Jan 15, a Australian Dollar enjoyed another bump, relocating absolutely over before resistance. With risk view changeable and a Aussie Dollar reaping a rewards, can a Australian Dollar continue aloft or has a greeting turn overblown?

AUD/USD Forecast

Looking to AUD/USD specifically, new elemental developments have seen a span transparent several levels of technical resistance. Moving forward, past insurgency will demeanour to offer as destiny support and keep AUD/USD afloat should risk hatred reemerge. To that end, stream conditions exhibit a miscarry has expected turn overextended as RSI treads in overbought territory.

AUD/USD Price Chart: Daily Time Frame (December 2018 – Jan 2020) (Chart 1)

aud/usd cost draft

With a Aussie Dollar’s spike on a initial trade understanding proclamation and successive follow-through on Dec 31, it could be argued most of a trade deal’s impact has been baked into a currency’s cost already. Since a specifics of a understanding are astoundingly meagre and story suggests a contingent understanding will expected disappoint, AUD/USD might be offering a matter for converging and see cost bluster before resistance.

With that in mind, AUD/USD might be developed for bearish opportunities as traders demeanour to sell a news as a Jan 15 signing-date nears. Therefore, a pivotal area of cancellation exists around a 0.7080 turn that coincides with a pair’s swing-high in July. Should AUD/USD transcend this level, it would advise risk ardour stays strong and a banking is still adjusting to a news of a trade deal.

That being said, areas of seductiveness on a short-side reside around a 0.6910 turn that aligns with a pair’s swing-low in July, a section that combined hesitancy in a past. A pierce to this cost would yield sufficient converging for a successive miscarry aloft in my opinion, as a longer-term impact of a trade understanding is felt, and tellurian expansion forecasts are revised higher.

Still, a shorter-term conditions of AUD/USD might see Aussie bearishness overcome as expectations are practiced in a middle timeframe. In a meantime, follow @PeterHanksFX on Twitter for updates on this trade idea.

–Written by Peter Hanks, Junior Analyst for DailyFX.com

Contact and follow Peter on Twitter @PeterHanksFX

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