Trading signals

Risk appetite increased after US President speech to Congress - US markets are moving to rally. USD looks strong amid higher chances for March rate hike, the probability is close to 70%.
Brent crude
US Department of Energy recent data (1st of March) showed an increase in crude oil inventories to 1.5 million barrels. However, the level of weekly inventory returned to the maximum (500 mln. barrels of oil, this level was back in 1982). Last substantial growth driver (OPEC coordinated efforts to cut production) is fully priced in by the market, and in the light of recent US inventories data, the success falls under doubt. In addition, risk appetite returning to the stock market deprives the oil market of speculative capital. In other words, the oil market is not in the interest of global investors at the moment. In such circumstances, the oil market won’t be able to get out of the medium-term range. We maintain our expectations for the medium term trading range $54.40- $57.20
Trading recommendations: Longs at $55.55, $54.40.

Gold
The prospect of US interest rate hike in March put gold under pressure and triggered profit-taking. Gold market dropped from yearly highs (USD 1260). However, from a technical point of view, the market has been overbought and there is a strategic 200-th moving average at 1260 area. The level of 1250-1260 is a very important resistance level for gold market - no reason to expect that this level can be completed in the near future. We expect the development of a corrective momentum and pullback at least to the area of ​​$1230 - $1235 where short-term longs may look attractive. (Medium-term uptrend still looks strong). In our opinion, shorts from the current market position look risky.
Trading recommendations: Longs at $1230- $1240.

USD/JPY
Amid positive equity market sentiment, the Japanese currency came under pressure. USD/JPY pushed up from the nearest strategic support in the 111.60 area and gained to $114.25 for last three days. The pair moved to the upper level of the medium-term range of $111.60- $114.60. At these levels, most likely we will see profit taking and corrective pullback. However, US –Japan monetary police divergence persists and in the medium term it will continue to exert pressure on the Japanese currency. We recommend considering USD longs against the yen. However, at current levels it is quite risky. It is necessary to wait for a pullback or for the settlement above $114.60. If the market will move through JPY114.60, the upward momentum can be expected in the area of ​​JPY116-JPY117.25
Trading recommendations: Longs on a pullback to JPY113.60 or when fixing above $114.60.

EUR/USD
The political uncertainty in connection with the upcoming elections in Europe, continues to put pressure on the single European currency. However, the weakness of the euro supports European stock markets and export sectors of the region. Negative market candidate for the French presidency weakened his position (Le Pen only 20% this week) and it is certainly a positive factor for the euro in recent days. We think that the market has already priced in the political risks for the single currency. Going short in Eur/Usd at current levels based only on those factors (political uncertainty) is now becoming very risky. Now the market is trading at a balance level Eur1.0530-Eur1.0540. We are seeing massive longs and massive sales at this level. USD looks strong but can be kind of overheated these days. Now everything depends on whether this level holds out. Our recommendations - wait for developments on this instrument. However, extremely risky longs Eur / Usd at 1.0520-1.0530 can turn out to be extremely profitable in the short term.