The market focuses on the upcoming comments of US regulator’s head

USD / JPY

The yield of US bonds fell amid concerns that Trump's tax reform could be postponed amid political complications in the US. Pressure on the US dollar weakened in recent days as equity markets recovered some ground. In addition, according to recent data, inflation in Japan may not be able to achieve the target levels of the Bank of Japan.

Technical analysis and recommendations:

Longs

The last upward momentum in the USD / JPY developed to the level of 110.80 USDJPY-slightly higher than our expectations. Then the pair came under pressure amid a surge of political uncertainty and local risk aversion in the form of profit taking in high-tech sectors at the beginning of the week. Expectations for the rate hike are completely priced in the current levels; on the contrary, we can expect a local weakening of USD and the pair can decline to 109.85-109.60 after publication of the decision. Now the market focuses on Yellen's comments and further prospects for the US economy. We maintain our outlook for USD / JPY gains. The nearest resistance is at the levels of 110.55-110.75.

Long-term and medium-term longs can be interesting under these market conditions. Players to buy a dollar against the Japanese yen can use local, corrective pullbacks.

EUR / USD

Positive data from the European economy can improve investment sentiment and create a medium-term demand for European assets. We expect that EUR will continue to moderately gain in the long term, the European currency may benefit from positive data indicating a recovery of the European economy and the ongoing political crisis in the US and the UK. Prospects for the slowing of stimulating policies from the ECB have dropped- Draghi made it clear that the regulator does not consider the possibility of ending the support the European economy in the near future. This limits the scope of strengthening the European currency, but its positions still look strong.

Technical analysis and recommendations:

Longs

The pair is consolidating in the narrow range of 1.1230-1.1185. The resistance is at the levels of recent highs of 1.1270-1.1310. The short-term situation is uncertain - our recommendations remain out of the market until the market situation becomes clear.

Brent Oil

Despite attempts to gain, oil remains under pressure. The latest data from the American Petroleum Institute (API) again turned out to be negative: oil reserves increased last week. Another negative factor for the oil market was OPEC reporting. Data showed an increase in production in May at 336 thousand barrels per day, to 32.14 million barrels per day. Today in the market focus - official data by US Department of Energy on oil inventories.

Technical analysis and recommendations:

Out of the market

Oil continues to look vulnerable. The observed attempts at rebound and recovery are not yet convincing. The nearest support is at the levels of 47.10-46.85.

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.