“Wages are not keeping up with inflation in the UK but it won’t stop the Pounds rise.”

In recent reports, I have suggested that any pull back on the Euro and Pound should be viewed as a potential buying opportunity when price rallies again. Today the GBP v NZD offers such a buying opportunity using a TIA entry from the Daily Trading Plan. I explain in today’s daily video update the wave formation and the risk management behind the trade. A similar set up is also occurring on the EUR v AUD that has an inverted head and shoulders formation supporting the trade.

The Pound and Euro lost momentum in the short term on Tuesday after weaker than expected economic data was released. What gave Traders a reason to short the Pound was weaker than expected average weekly earnings which dropped to 2.8% from the 3% expected. Wages growth is not keeping up with inflation and that was the concern. The Euro also fell after a far weaker than expected German economic sentiment survey. Looking at the longer economic outlook, the UK and Europe have plenty of upside and when it comes to currency values they are driven in major trends by interest rate expectations and in my opinion, both currencies have the potential to continue to move higher throughout 2018. The Bank of England will raise rates in the coming two months and the European Central Bank will wind back its stimulus program later this year and raise interest rates in 2019 and this expectation will see big swags of money come for both currencies under the current fundamental conditions.

The US Dollar was mildly supported on Tuesday and it was a direct result of the Euro and Pound falling in value and US Industrial Production and Housing Starts numbers beating the market’s estimates. Stocks did rise as traders simply don’t have anything to fear at present, however, I will warn traders that any rallies on stock indexes under the current expectation of higher interest rates should be viewed as a potential shorting opportunity when sharp selling pressure returns.

Trump claimed on Tuesday China and Russia are trying to devalue their currencies and this may be true, but in the big scheme of things a Twitter tweet making such a claim is going to be old news in coming hours and should be ignored.

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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The post Today’s Key Market Drivers: 18th April 2018 appeared first on Ltg Goldrock.