Thursday, 6 April 2017
On Wednesday, Brent crude futures tested level $55. However, weekly data on the US energy reserves (which showed unexpected growth in inventories) turned out to be worse than expected and rolled back to price of $54 where a 200-day average is running now and serving as strong support. Nevertheless, the positive sentiment persists. After some consolidation in the region of the 200th average, the growth continues. We also maintain a positive outlook for the oil this month, expecting price to go up to $56.40.
Trading recommendations: Longs at level $54.
The expected gold pullback from the strategic resistance level did take place. However, the decline was bought out at levels of $1245, as the price immediately returned to the area of $1252. This shows market expectations. Some pressure on gold is exacerbated by stronger US currency. Our expectations for the gold market persist. The nearest support is located around $1245- $1250. However, it is worth to note that, the market is waiting for the development of the event that will take place in the second part of this week. Thursday-Friday are extremely informative days. (Negotiations between the leaders of the US and China, Friday's data block on the labor market and the minutes of the recent ECB meetings, and published minutes of the Fed).
Trading recommendations: Longs at $1245- $1250.
The pair continues to consolidate in the area of strategic support - JPY110.30-JPY110.45. The situation on the market has not changed significantly. The divergence in the monetary policy of the US and Japan will continue to influence: the Fed can again raise rates in June and September this year. This factor is able to reverse the pair and will have a medium-term and long-term impact. Despite the fact that the risks in the stock markets continue to rise, we believe that support in the 110 area will be withheld and looks like a good place to go middle-term longs.
Trading recommendations: Longs at JPY110.
The situation on the Eur/Usd market has not changed significantly. The pair is oversold and stumbled upon support in the area of Eur1.0630-Eur1.0660. At this level, we see constant attempts by the market to buy back the pair and keep the level. Weakness of the European currency is explained by a decrease in the likelihood of ECB monetary policy tightening amid weaker Eurozone inflation. (Inflation fell from 2% to 1.5%, which is below expectations of 1.8%) The pair has reached significant support in the area Eur1.0645-Eur1.0660. Political uncertainty also puts pressure on the pair. Maybe it is time to consider cautious longs at Eur1.0640 with short stops.
Trading recommendations: Longs at Eur 1.0640.
Fort Financial Services
This trading analysis is for informational purposes only and is not intended to be a strict recommendation for action or an offer for the purchase or sale of any currency, future or stock. Publishing the information we do not try or to attract any funds or deposits. We share our analytical view of current market situation and we don’t have any open position in instruments discussed and no plans to open any positions. Any person considering this research should carefully consider the risks associated with this and the level of trading experience.