Today’s Key Market Drivers: 14th March 2019
UK Parliament votes to reject a no deal Brexit approach.
The UK Parliament voted on Wednesday to reject any proposal that would see it exit the EU on March 29th without a deal. Leaving the EU without a signed EU agreement was being seen as a potential disaster for economic and trade stability so traders saw the vote on Wednesday as positive news and rallied the Pound higher against all of its major rivals.
Volatility will remain high as UK parliamentarians will now vote again on Thursday to extend the current Brexit exit date of March 29th to allow for another renegotiated deal. This could see any current rally fade quickly if the EU reject any proposed extension beyond March 29th. There is still the chance that a “no deal” result could occur which would mean the UK falls out of the EU on March 29th without the planned 21 month transition period. Hold onto your hats this Brexit drama is far from over yet.
US Durable Goods beats estimates but fails to rally the Greenback.
February’s US Durable Goods number beat market estimates by 0.8% suggesting US consumers are still happily spending up on big-ticket items in retail stores. The positive data number was not enough to save the US Dollar’s slide which continued lower through the Wednesday trading session as traders continue to price in their expectation the US Fed will not raise rates in 2019.
The rally on the Pound also helped suppress the US Dollar as investment banks and hedge funds increased their bets the UK avoids a hard Brexit at the end of the month. There isn’t a single investment bank or hedge fund that knows how the final result will play out and any large positions they have in the market they will be watching like hawks.
Trading can be a game of cat and mouse.
Yesterday I elected to exit my long AUD v USD position with a very small profit. I sent a Trade Time Alert explaining the reason for my early exit and if you did not have the opportunity to read it the reasons were.
- Price had moved 2/3’s of the way to the profit objective through the US trading session and therefore when this occurs, I can elect to eliminate risk on the trade.
- A far weaker than expected Australian Consumer Confidence number was released which sent the trade slightly negative.
- The Asian trading session was also bearish which was weighing on the AUD.
- The market at the time was also getting increasingly nervous about what the UK parliament was going to vote for regarding Brexit. This is why Asian stocks were lower.
- If stocks continued to decline the AUD would likely have continued to go lower.
This morning it appears I may have made the wrong decision with the AUD v USD trading back higher, but in line with my trading plan, my analysis, and my logical (not emotional) decision making I did exactly the right thing, for MY plan and my trade. As I said yesterday my trading plan won’t always make the right decisions, but it will look after me over the long term and limit any major downside risk.
Trading is not an exact science and it can often be a game of cat and mouse but managing risk and ensuring you are using a logical pre-defined approach that allows you to make non emotional decisions will see you win handsomely in the long run.
Traders have started to arrive for Trading Mastery.
Traders from Australia, New Zealand, Malaysia, the UK, and the Middle East are now making their way to Noosa Heads for Trading Mastery which will kick off on Saturday morning bright an early on Noosa Main Beach. This event is going to be an incredible Wealth, Health and Happiness summit and yesterday morning I checked out our daily walk and running trail and took time to have a swim at the beach we will call “home beach” during Trading Mastery. Check it out here.
Become the person you have always wanted to become. Start today!
About the Author: Andrew Barnett
Andrew is a professional trader and successful investor who has a strong focus on education. He is a regular Sky News Money Channel Guest and one of Australia’s most awarded and respected financial experts and is regularly contacted by the Australian Media for the latest on what is happening with the Australian Dollar. Director at LTG GoldRock, Andrew Barnett, guides thousands of traders around the world in the live market on a daily basis, advising them on buy and sell directions, as well as trading his own personal account. Andrew, a regular keynote speaker at trading and wealth-creation events throughout the Asia Pacific region, is an authorized representative registered with the Australian Securities and Investment Commission (ASIC).
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