Trading signals from FORTFS

USD / JPY
US treasury yields dropped amid concern that Trump’s tax reform may be deferred as well as continuing political uncertainty around US president; this puts pressure on USD/JPY. As expected USD/JPY dropped below level 110. However, JPY is overbought and may weaken in the medium and long term: Japan's inflation may not be able to reach the BOJ's target.
Technical analysis and recommendations:
Longs
USDJPY found support and middle terms demand at 109.10 where the pair moved to recovery. 109.10 is now a kind of local low and support level. The upward momentum seems to expand to the area 110.45-110.50. Middle terms longs may be interesting in this market conditions. Look for local corrective pullbacks.
EUR / USD
Improved Euro data may boost European investment sentiment.
We expect EUR to keep on gaining in the short term as dominating factors are still the same: EUR may gain on improved European economy and continuous US political risk. There is yet another factor for euro gains - market’s attention is shifting to expected Draghi softer rhetoric. The pair may test higher to 1.1485. In the long term, EUR may get back under pressure if Trump’s tax reform and fiscal expenditure will take place.
Technical analysis and recommendations:
Longs
For the whole week full of important data EurUsd is consolidating above support level 1.1190-1.1207, that now appears to be tactical support. The nearest resistance is in the area of last week's highs. Overcoming 1.1270 will open the road to the area of 1.1320. We look for Eur upward impulse to continue. However today ECB meeting may trigger higher volatility.
Brent
The official data on oil inventories did not meet the expectations of the players and could not return a positive sentiment to the market. The decline in the oil market continued, futures fell to the region of $ 47.90. The current decline is not justified from the fundamental point of view. The market is oversold. However, there are risks of local decline to the levels of the end of 2016- 42-44 dollars per barrel.
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.