What to trade in November 2017
Crude Oil and UK Brent
Apparently, the energy industry will be a very popular among binary options and forex traders this month. In the last week of October, we have witnessed a new stage in the development of the energy industry. Saudi Prince Mohammed bin Salman commented that Saudi Arabia is going to cut the production and shared a vision of the future of the industry being lead by non-OPEC suppliers, like Russia.
Meanwhile, according to the EIA Crude Oil Inventory report, the US Crude oil export exceeds 1 million per day for the 5th week now. Its price per barrel rose to $54 and currently at its highest for the almost 8-month period.
Professional oil traders are mostly focused on the UK Brent, which is currently traded at its 27-month high record. The price hiked up to $60 a barrel, which is the highest that it has been since 2015.
By all means, the boost in the oil prices is triggered by both economic and geopolitical reasons. Crude oil supplies from Iraq have fallen after the central government took control of oil fields in disputed territories from Kurdish forces. At the same time, the US President Donald Trump's policy towards the sanctions on Iran’s energy sector keeps raising many concerns about country's oil exports. With all that turmoil, our prognosis is that Crude Oil and UK Brent will be very volatile assets to trade this month.
US Dollar continues to climb up hitting the 3-month stake so far. The Federal Reserve announced reducement of the size of its balance sheet, which had a positive effect on the Dollar value.
The US President Donald Trump is going to announce his choice for the next Fed Chair and the chosen one will be more willing to raise the policy faster once the new term begins in February. Meanwhile, the current Fed Chair Yellen gave a hint that we can expect a rate hike in December, which makes the release of November’s policy statement a setup for what is going to follow.
The Federal Open Market Committee (FOMC) will gather for a policy meeting and discuss the data releases including October’s employment numbers. It seems likely to strengthen the further green trend of the Dollar.
The CAD was seriously affected by the data released last week. Retail sales data from Canada turned to be pretty weak and more doubts appeared concerning the Bank of Canada’s interest rate hike in the future.
It appears to be that the BoC interest rate decision will carry the current policy into 2018 as “growth is expected to moderate to a more sustainable pace in the second half of 2017.” Traders are closely watching for any further comments from the Bank of Canada, which can support USD/CAD. However, inflation is currently hitting the 2% target "a little later than anticipated in July because of the recent strength in the Canadian dollar."
According to the majority of market analytics, USD/CAD is going to be under pressure and most likely continue falling dawn.