Tuesday, 18 April 2017
Trading signals - Geopolitics restrain trading activity
The pair is still under the same influential factors - geopolitical tensions determine the demand for safe-haven assets. However, if geopolitical risks are weakened, we can expect a massive Japanese yen decline as the pair is oversold.
- The positive start of the corporate reporting season in the US and the return of demand for equity assets can ease the pressure in the pair.
- Weakness of the US currency amid US President's political statements is a short-term speculative factor in favor of the Japanese yen.
- Expectations of FED hawkish policy may not be justified in the absence of signals conforming the accelerating economy and stable inflation in the US.
The level 108.70-108.50 now acts as the nearest support (the 200th moving average will support the price). Despite attempts to push the market lower, we observe large-scale longs from 108.50 and below.
The European currency gained amid the US dollar weakness background.
- The chances for a hawk policy from the Fed are declining, President Trump said that the dollar "is becoming too strong." The dollar index sank to a psychological level of 100 points.
- Political risks continue to determine the agenda in Europe. In the focus , the first round of elections in France already on this weekend.
Technical retracement from the levels of $56.50. The level of $56.50 still appears as a strong resistance.
- The focus is on inventories data from API and the US Department of Energy.
- American currency weakness is a positive factor for the oil market.
Fort Financial Services
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