Tuesday, 11 April 2017
Trading signals - Geopolitics in focus as markets trade in tight ranges
USD/JPY will trade between 110.11-112 with short term upside sentiment.
- Although the US launched missile strikes against Syrian government army - risk aversion did not rise significantly as equity markets try to stay in the green, which restrain safe-haven JPY support. Starting US corporate profit season will bring some positivity in equity markets and ease pressure in the pair.
- Despite worse than expected US job data, US unemployment rate dropped from 4.7% to 4.5%. If unemployment rate continues to stay low, FOMC position will soon turn more hawkish.
USD/JPY failed to drop lower to 110.10. The pair seems to have massive support zone around 110.11. The upward technical pullback is expected.
EUR may be under pressure as the ECB keeps its supportive police in tact.
- French presidential election is a risk factor for European currency. However, Marine Le Pen is losing her chances as Macron gains larger support from voters.
- The ECB will continue its supportive monetary policy as Dragi views the inflation as still low.
EUR/USD dropped to support level around 1.0570. The market is oversold and an upward corrective pullback is possible. The support zone is located 1.0500-1.0530.
Oil recovered back to 55.87 amid geopolitical tension and returned to middle-term channel $54.50-$57.
- Another suspension of Libya production is a positive factor for the oil
- US crude inventories is in market focus and may be a trigger for short term profit-taking
The oil geopolitical growth seems to be exhausted as market is overbought. The oil will stay in the range of 54-56 dollars per barrel. This week, the market will focus on OPEC and IEA reports.
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.