Trading Opportunities For The Week Ahead – January 23rd

President Donald J. Trump Presiding Over the United States of America….

Media outlets inundated viewers with their opinions on the 58th Inauguration of the President of the United States. For the most part Trump’s fiery speech resonated with his disgruntled voters, but did little to assuage the concerns of Democrats. In typical firebrand fashion, President Trump outlined his core message to the American voter: You will never be forgotten again. The Trump phenomenon is grounded in patriotism, which has unfortunately been tarred with the same brush as National Socialism of war-era Germany.

Britain’s Brexit vote was a prelude to Trump’s election. We can expect similar movements to be taking place throughout Europe, with Scotland leaning towards an independence referendum this year. The global economy has already been spooked by fears of a Grexit, and that remains a viable proposition if the Greek economy cannot be stabilized. Viewed holistically, a new global economy is being formed, and multiple changes are underway. Key industries to look out for include the automobile industry, the energy industry, banking and finance, and the military.

Trading Opportunity #1 – USD/GBP Currency Pair Trending Bearish

 

The USD/GBP currency pair is presently 0.3121% lower at 0.8082. The pair has a 52-week high of 0.83 and a low of 0.67. The dollar’s recent decline against the GBP has been brought about by the dual effect of greenback weakness and a strengthening of the GBP. At the end of Q1 2017, US GDP is expected to decline to 2.50%. Within 12 months, US GDP should be hovering around 1.90%. Econometric models suggest that a 2% GDP figure will be attained by 2020. Optimism has been increasing in the US economy, what with initial jobless claims hitting a 43-year low recently. The number of unemployment benefits decreased from 249,000 (for the week ending January 8, 2017) to 234,000 for the week ending January 14, 2017. Markets were anticipating jobless claims of 254,000. This economic data release was bullish for the USD, and resulted in upbeat sentiment for the USD/GBP pair.