Tifia Daily Market Analytics

[TifiaFX]

Brent: prices are falling again_18/04/2017

Current dynamics

After the Easter weekend, oil prices are declining for the second consecutive day. Investors are trying to assess the strong oil demand in China, on the one hand, and the increase in oil production in the US, on the other hand. In China, there is a higher growth of the national economy in the 1st quarter. It is likely that the impetus for growth in the PRC will remain at least in the first half of this year. Against this background, oil imports to the PRC in March reached a record high.

After the US Energy Ministry reported that the production of shale oil in the seven oil-rich regions of the country could grow by another 2.5% per day in May, compared with the forecast, oil prices fell by about 1% on Monday. If this happens, the monthly increase will be the strongest in two years.

Many analysts of the oil market believe that in the next two years the production of shale oil in the US may exceed forecasts. The International Energy Agency (IEA) predicts that oil production in the US by the end of this year will grow by 680,000 barrels per day compared to the end of 2016. Oil production outside OPEC this year could thus increase by 485,000 barrels per day.

The next meeting of the cartel, which may decide to extend the deal to reduce oil production, will be held on May 25. If hopes do not materialize, oil quotes may fall sharply.

Today at 20:30 (GMT), the American Petroleum Institute (API) will publish its report on changes in oil reserves in the US over the past week. And on Wednesday at 14:30 the Ministry of Energy of the United States publishes a weekly report on oil and petroleum products in the US storage. Reduction of reserves favorably affects oil prices, and vice versa. The growth of stocks puts pressure on oil prices.


Support and resistance levels

With the opening of the current week, the price of oil is declining. During the European session, the price reached a short-term support level of 55.20 (EMA200 on the 1-hour chart).

Indicators OsMA and Stochastics on the 1-hour, 4-hour, daily charts went to the side of sellers.

If the decline continues, the price for Brent crude will reach support level 54.28 (EMA200 and the bottom line of the ascending channel on the 4-hour chart).

With further decrease, the targets will be support levels of 53.00 (June and October highs), 52.00 (EMA200 on the daily chart), 50.70. In the case of a confirmed breakdown of the support level of 50.70 (the Fibonacci retracement level of 61.8% of the correction to the decline from the level of 65.30 from June 2015 to the absolute minimums of 2016 near the 27.00 mark) and fixing below the level of 50.00, the upward trend in the price for Brent crude oil will be canceled.

However, from the current level of 55.20 it is also highly probable that there will be a retreat and a resumption of growth.

Updating the monthly highs near the 56.70 mark will indicate a further increase in the price of Brent crude oil.

Support levels: 55.20, 54.28, 54.00, 53.00, 52.00, 50.70

Levels of resistance: 55.60, 56.70, 57.00, 57.50



Trading scenarios

Sell Stop 54.85. Stop-Loss 55.60. Take-Profit 54.00, 53.00, 52.00, 50.70

Buy Stop 55.60. Stop-Loss 54.85. Take-Profit 56.70, 57.00, 57.50

 

[TifiaFX]

GBP/USD: Theresa May's decision has crumbled European stock markets _19/04/2017



Current dynamics

After yesterday, British Prime Minister Theresa May unexpectedly announced early parliamentary elections, the British stock market collapsed. Following the index FTSE100, which lost almost 2.9%, followed all the European major stock indexes. Sale on the stock markets of the UK and Europe caused a sharp strengthening of the pound and the euro. The pair GBP / USD rose yesterday almost by 350 points, to the level of 1.2900, however, to the close of yesterday's trading day fell to the level of 1.2840.

The pound grew throughout the currency market, Investors expect that early general elections in the UK will allow Prime Minister Theresa May to consolidate the dominant position of the Conservative Party in parliament on the eve of the June elections in order to agree with the EU on more favorable conditions for Brexit. If the Conservative Party has more seats in the parliament, this will neutralize the influence of supporters of the tough scenario Brexit. Then the pound can get even stronger. At its last meeting, the Bank of England left interest rates unchanged at 0.25%. At the same time, inflation in February reached a maximum in more than three years amid a sharp weakening of the pound (more than 20%) after the referendum for Britain's exit from the EU. Recent positive macroeconomic data from the UK, as well as sharply increased inflation in the country, suggest that the Bank of England may return to the issue of raising the interest rate in the UK. And this is a positive factor for the pound.

From the news for today, we are waiting for the publication at 18:00 (GMT) of the Fed's economic review (Beige Book), which examines the current situation in the US economy. Optimistic views of economists, reflected in the review, will help strengthen the US dollar, and pessimistic - weaken the USD.


Support and resistance levels

Yesterday, after Theresa May announced her decision, the pound and GBP / USD pair rose sharply. The pair GBP / USD broke through an important resistance level of 1.2770 (EMA200 on the day market).

At the same time, the US dollar regains its position in the foreign exchange market. In the GBP / USD pair, correction may also begin. The immediate goal of the decline in this case will be the level of 1.2770.

Indicators OsMA and Stochastic on the 1-hour, 4-hour charts were deployed to short positions.

The reverse scenario will be associated with the further growth of the GBP / USD pair in case of consolidation above the current high near the 1.2860 mark.

Negative dynamics of the pair GBP / USD prevails below the level of 1.2770. Only in the case of consolidation above the level of 1.2900 (yesterday's highs) can we consider the long positions for the pair GBP / USD.

Support levels: 1.2770, 1.2590, 1.2485, 1.2110

Resistance levels: 1.2905, 1.3000, 1.3350



Trading scenarios

Sell in the market. Stop-Loss 1.2865. Take-Profit 1.2770, 1.2590, 1.2485

Buy Stop 1.2860. Stop-Loss 1.2820. Take-Profit 1.2905, 1.3000, 1.3100

 

[TifiaFX]

XAU/USD: The dollar is in no rush to take positions

20/04/2017

Current Dynamics

While the euro and the pound are growing again in the foreign exchange market, the dollar is in no rush to retreat against the yen and gold, which are asset-seekers. So, with the opening of today's trading day after the active decline in the day before, the pair XAU / USD is trading in a narrow range near the level of 1276.00 dollars per troy ounce. If the pound and the euro are moving at the moment in the foreign exchange market according to their scenario, the precious metals and, in particular, gold, after reaching the local annual highs at the beginning of this week, stopped rising.

If the elections in France are completed safely for the euro, i.e. If candidates from the extreme left and extreme right do not win, then the situation in the financial markets will calm down a little. The threat of a sovereign default of France and its withdrawal from the EU will be lifted.

Nevertheless, while the uncertainty with the elections in France exists, as well as the threat of sales of France's sovereign debt of about 1 trillion euros, gold will not be cheaper, despite the Fed's plans to tighten monetary policy and reduce its budget.

Boston Federal Reserve Bank manager Eric Rosengren said on Wednesday that the Fed should begin the process of reducing its asset portfolio "the sooner, the better." This will allow the Fed to raise short-term interest rates without harm to the economy, according to Rosengren. He also noted that the interest rate should be the "main mechanism" affecting the state of the US economy. Thus, the Fed continues to receive signals for a gradual tightening of monetary policy in the US.

Gold is cheaper in the situation of an increase in the interest rate in the US, t. It is difficult for him to compete with interest-bearing assets. The cost of its acquisition and storage with a tightening of monetary policy is growing.

The restraining factor from the decline in the price of gold is still geopolitical instability in the world and the position of US President Donald Trump, who repeatedly spoke in favor of a cheap dollar. In a recent interview with the Wall Street Journal, he said that the dollar "is becoming too strong" for US goods to compete successfully in the market.

Of the expected news for today, it is worth paying attention to data from the United States. At 12:30 (GMT), a weekly report from the US Department of Labor on the number of new applications for unemployment benefits is published. According to the forecast, the number of benefits is expected to increase to 242,000 (against 234,000 last week). If the data turn out to be worse, it will negatively affect the dollar, and vice versa, a low result will strengthen the dollar.

During the period from 15:30 to 17:30, several key figures of the world financial market, Bank of England Chairman Mark Carney and US Treasury Secretary Stephen Munchin are expected to perform. In this period of time, a surge in volatility is expected across the financial market, including XAU / USD.


Support and resistance levels

With the opening of today's trading day, the pair XAU / USD is trading near support level 1277.00 (Fibonacci level 61.8% correction to the wave of decline since July 2016 and EMA144 on the 1-hour chart).

Indicators OsMA and Stochastics on the 1-hour, 4-hour and daily charts are deployed to short positions.

In case of breakdown of support levels 1277.00, 1274.00 (EMA200 on the 1-hour chart), the decline in the pair XAU / USD will accelerate. The immediate targets will be support levels 1260.00 (February and March highs), 1253.00 (EMA200 on the 4-hour chart), 1248.00 (Fibonacci level 50.0%). Fixing of XAU/USD below the levels of 1235.00 (EMA200 on the daily chart), 1220.00 (Fibonacci level of 38.2%) will cancel the uptrend.

Nevertheless, while the pair XAU / USD is above the support level of 1248.00, it keeps positive dynamics. The closest target in the case of continued growth of the pair XAU / USD will be the level of 1300.00. But for this, the pair XAU / USD needs to gain a foothold above the local maximum near the 1292.00 mark (April highs).

Support levels: 1277.00, 1274.00, 1260.00, 1253.00, 1248.00, 1235.00, 1220.00

Levels of resistance: 1287.00, 1292.00, 1300.00



Trading Scenarios

Sell Stop 1273.00. Stop-Loss 1284.00. Take-Profit 1260.00, 1253.00, 1248.00, 1235.00, 1220.00

Buy Stop 1284.00. Stop-Loss 1273.00. Take-Profit 1290.00, 1300.00, 1305.00

 

[TifiaFX]

DJIA: Stephen Mnuchin cheered up investors

21/04/2017



Current Dynamics

US Treasury Secretary Stephen Mnuchin said in his yesterday's speech that the tax reform plan will appear "very, very soon". This plan will be "decisive, substantial and will be the main priority for President Trump." After the presidential elections in the US against the backdrop of Donald Trump's pre-election promises to carry out tax reforms and stimulate fiscal policy, American stock markets and indices were actively growing, and government bonds were subject to large-scale sales. Now the US stock markets are seeing the opposite picture.

Investors are still being pressured by increased geopolitical tensions in the world after US missile strikes against Syria. The growing tensions between the US and North Korea also do not contribute to an increase in appetite for the purchase of risky assets. Investors once again prefer government bonds and other assets-seekers - gold and yen.

Also the general picture spoils some negative macro data coming from the USA. So, the data released yesterday by the US Department of Labor showed a reduction in the number of repeated applications for unemployment benefits last week and an increase in the number of initial applications (244,000 versus 234,000 last week). The index of production activity, which is interrelated with the ISM index, fell to 22 points in April (against 32.8 in March).

Nevertheless, the main US stock indexes have grown today thanks to reports of companies exceeding the expectations of economists. Dow Jones Industrial Average rose on Thursday by 0.9% to 20582 points, S & P500 - by 0.8%, Nasdaq Composite - by 0.9%. The yield of 10-year US Treasury bonds against their sales rose to 2.257% from 2.202% on Wednesday, which also helped strengthen the dollar. US Treasury Secretary Stephen Mnuchin cheered up investors, giving them hope that Trump's plan to stimulate the US economy would still be realized.

Today, the financial markets have a low activity of traders on the eve of the first round of the presidential elections in France, which will be held this Sunday. The risk that the results of the elections could violate the integrity of the EU, still hinders investors from actively operating in the financial markets. If Marin Le Pen wins, which promised to withdraw France from the European Union, then the euro and European stock markets could literally collapse. Following them, American stock markets can follow. The demand for gold and yen will grow sharply.

Of the news for today is worth highlighting data from the United States. At 13:45 (GMT), indexes of business activity in the manufacturing sector and service sector (PMI) from Markit for the US for April (preliminary value) are published. The index is an important indicator of the state of the US economy as a whole. At 13:30, the speech of the head of the Federal Reserve Bank of Minneapolis Neil Kashkari begins, which is likely to follow the statements of other representatives of the Fed on the monetary policy in the US in general, and will favor an early increase in the rate in the US and a reduction in the Fed's budget. This will have a positive effect on the dollar, but is unlikely to support the US stock indexes.


Support and resistance levels

From the beginning of the previous month, the DJIA index, in general, is declining. With the absolute highs reached at the end of February near the 21170.0 mark, the DJIA index lost about 3.5%, having fallen to the current level of 20600.0. However, after yesterday's statements by US Treasury Secretary Stephen Mnuchin, the DJIA index rose, broke through the short-term resistance level of 20555.0 (EMA200 on the 1-hour chart), however, it was suspended by resistance level 20620.0 (the upper limit of the descending channel and EMA200 on the 4-hour chart).

The indicators OsMA and Stochastics on the 1-hour, 4-hour chart again unfolds to short positions.

If the DJIA index returns below the level of 20555.0, then its decline may continue to the nearest support level of 20360.0 (the lower limit of the descending channels on the 4-hour and daily charts).

If the downward trend is to increase, the decline in the index may extend to the support levels of 1990.0 (December highs), 19850.0 (Fibonacci level of 23.6% correction to the wave growth from the level of 15660.0 after rebounding in February this year to the collapse of the markets since the beginning of the year. The maximum of this wave and the Fibonacci level of 0% is near the mark 21160.0). Further decline and breakdown 19600.0 level (EMA200 on the daily chart) will be critical for the bullish trend of the DJIA index.

To return to the purchases, the index must be fixed above the level 20750.0 (the upper limit of the range between the levels 20750.0 and 20360.0). While short-term downward correctional dynamics prevails.

Support levels: 20555.0, 20360.0, 19990.0, 19850.0, 19600.0

Resistance levels: 20620.0, 20750.0, 20886.0, 20980.0, 21170.0



Trading Scenarios

Buy Stop 20650.0. Stop-Loss 20540.0. Take-Profit 20750.0, 20886.0, 20980.0, 21170.0, 22000.0

Sell Stop 20540.0. Stop-Loss 20650.0. Take-Profit 20360.0, 19990.0, 19850.0, 19600.0

 

[TifiaFX]

EuroStoxx50: Centrist Emmanuel Macron leads the presidential race

24/04/2017

Current dynamics

According to the latest information, during the first round of the presidential elections in France, Emmanuel MacRon won 23.9% of the vote, the second among Marin Le Pen with 21.4%. It is likely that during the second round of elections, Macron can defeat Le Pen. Conservative Francois Fillon, who took third place, has already called on his supporters to vote for Macron.

Macro's economic policy is favorable for the Eurozone and European financial markets. In the implementation of its economic program, the former Minister of Economy centrist Macron plans to reduce taxes for companies and increase public investment by 50 billion euros. Macron also advocates the expansion of economic partnership within the Eurozone, primarily with Germany. The victory of Macron during the first round of elections can provoke the growth of demand for euro and European assets.

According to EPFR Global, the inflow of funds into the market of shares in the region is increasing, the funds have already begun moving to the European market. The macroeconomic statistics of the Eurozone is improving, the stocks have appreciably fallen in price since the beginning of the month, and all points to the probability of activization of buyers of European assets after the elections in France. So, according to the latest data, business activity in France is growing at the fastest pace in almost six years. IHS Markit's purchasing managers' index in March was 57.1 (the value above 50 indicates activity growth).

Nevertheless, one should be careful when opening long positions on the EuroStoxx50 index this week. On Thursday (11:45 GMT) the ECB's interest rate decision will be published in the Eurozone. The modest growth rates of the Eurozone economy remain, the unemployment rate still remains at high levels (about 9.5%), and annual inflation fell to 1.5% in March against 2% in February, again below the ECB's target level.

As several ECB leaders announced last week, it is not yet time to make changes in the monetary and credit policy of the bank. "The recovery of the economy is still unstable," despite signs of improving the economic situation in the Eurozone. The next meeting of the ECB will be held on April 26-27, and, according to the statements of key figures of the ECB leadership, the European Central Bank will not change the extra soft monetary policy.

And this will become a supporting factor for the European stock market. At the same time, the victory of Macron can give the European Central Bank an opportunity to consider the question of the beginning of the curtailment of the stimulation of the Eurozone economy. If during the next press conference the head of the ECB Mario Draghi only hints at the possibility of starting the curtailment of the QE program in the Eurozone, the European stock indexes will react with a decrease.

If the ECB declares the continuation of the economic stimulus program, the rally on the European stock markets will continue, given the victory of Macron in the first round of elections and the increase in the probability of his victory in the second round of elections.


Support and resistance levels

The EuroStoxx50 index has been actively growing since the beginning of December and began to decline in April ahead of the presidential elections in France. Having opened with a gap up, the EuroStoxx50 index today broke through an important resistance level of 3515.0 (the Fibonacci level is 100% correction to the wave of decline since December 2015) and exceeded this level by 50 points. At the beginning of today's European session, the EuroStoxx50 index trades near the level of 3568.0 (the upper limit of the ascending channel on the daily chart).

Indicators OsMA and Stochastics on the 4-hour, daily, weekly charts turned to long positions. If the positive dynamics continue, the EuroStoxx50 index will continue to rise in the uplink on the weekly chart, the upper limit of which runs near the level of 3680.0 (July highs of 2015).

An alternative scenario for the decline of the index will be linked both to the results of the second round of elections in France, if Marin Le Pen wins, or to the position of the ECB if the bank signals for the curtailment of the QE program in the Eurozone.

The signal for opening of the medium-term short positions on the EuroStoxx50 index will be a breakdown of the support level 3400.0 (EMA50 and the lower limit of the ascending channel on the daily chart).

In this case, the reduction targets will be support levels 3325.0 (January highs), 3240.0 (EMA200 on the daily chart).

Positive dynamics is maintained, while the EuroStoxx50 index is above the levels of 3240.0, 3200.0 (Fibonacci level 61.8% correction to the wave of decline since December 2015).

Support levels: 3515.0, 3400.0, 3325.0, 3300.0, 3240.0, 3200.0

Resistance levels: 3578.0, 3600.0, 3680.0


Trading Scenarios

Sell Stop 3510.0 Stop-Loss 3560.0. Take-Profit 3470.0, 3400.0, 3325.0, 3300.0, 3240.0

Buy Stop 3585.0. Stop-Loss 3545.0. Take-Profit 3600.0, 3680.0, 3700.0

 

[TifiaFX]

XAG/USD: precious metals are getting cheaper

25/04/2017

Current Dynamics

The victory of Macron in the first round of the presidential elections in France reduced investors' anxiety over the possible victory of the far-right candidate Marin Le Pen in the French elections. As you know, Marin Le Pen acts with a radical program on migration, as well as the continued presence of France within the European Union and NATO.

If Macron succeeds in winning in the second round, this will be the second defeat of the supporters of secession from the European Union after the Netherlands. And this, in turn, will revive the propensity of investors to buy risky assets and lower prices for precious metals.

So, the June gold futures on COMEX fell yesterday in the price to the level of 1277.50 dollars per troy ounce, the lowest closing level since April 7, showing the strongest daily decline since March 10.

The spot price for silver is also declining today, continuing the series of falls from recent monthly and annual highs near the level of 18.55 dollars per troy ounce. The decrease from this level was already 4.2%.

And yet, on the eve of the second round of the presidential elections in France (the vote will be held on May 7), the weakening of the US dollar, the continuing geopolitical uncertainty will contribute to the preservation of demand for precious metals.

Investors are also concerned about the uncertainty regarding the timing of the start of the tax reform of US President Donald Trump, although the plan for reform Trump promised to present this week.

If the Fed starts implementing a plan to reduce its budget and increase the interest rate, as well as the first positive results in the implementation of the new economic policy in the US, the dollar will receive a powerful impetus to resume large-scale growth. This will lead to lower prices for precious metals, including silver.

Today we are waiting for data from the USA. At 14:00 (GMT), the US consumer confidence level for March is published, as well as data on sales of new housing in the US in March. These data are an important indicator of consumer confidence in the growth of the economy and the US real estate market. The increase in sales of houses also contributes to stimulating the accompanying spheres of industry, services, and the labor market. A high result strengthens the US dollar, low - weakens. Forecast: the level of consumer confidence will come out with a value of 123.7 (compared to 125.6 in February), sales of new homes in March decreased by 0.5%. If the forecast is confirmed or is worse, the dollar will react with a decline.

In any case, during the publication of data, the volatility in the dollar is expected to grow, including in the pair XAG / USD.


Support and resistance levels

The pair XAG / USD continues the almost non-stop decline for the seventh consecutive session.

The XAG / USD pair broke through the important support levels of 18.17 (the Fibonacci level of 50% of corrective growth to the fall of the pair since August 2016 and the level of 20.59), 17.94 (EMA200 on the 4-hour chart) and continues to decline to an important support level of 17.58 (EMA200 on the daily chart And the Fibonacci level of 38.2%).

Indicators OsMA and Stochastics on the 4-hour, daily, weekly charts went to the side of sellers.

The break at the level of 17.58 raises the risk of further reduction of the pair XAG / USD and its return to a downtrend with a long-term target of 15.72 (the low of 2016).

You can return to consideration of long positions after fixing the pair above the level of 17.94.

Support levels: 17.58, 17.10, 16.85, 16.20, 15.72

Levels of resistance: 17.94, 18.17, 18.55, 18.75


Trading Scenarios

Sell Stop 17.77. Stop-Loss 17.92. Take-Profit 17.58, 17.10, 16.85, 16.20, 15.72

Buy Stop 17.92. Stop-Loss 17.77. Take-Profit 18.00, 18.17, 18.55, 18.75

*) Actual and detailed analytics can be found on the Tifia website at tifia.com/analytics

 

[TifiaFX]

AUD/USD: data on inflation did not meet expectations_26/04/2017



Current dynamics

After this morning, the Australian Bureau of Statistics and the RBA published the most important inflation indices in Australia (CPI for the first quarter of this year, the RBA index of core inflation by the truncated average method for the first quarter), the Australian dollar declined in the foreign exchange market.

Although the inflation rate returned to the central bank's target range of 2% -3%, the data on the rate of price growth turned out to be weaker than expected. Consumer prices in the first quarter increased by 0.5% compared to the previous quarter (by 2.1% in annual terms). The forecast provided for an increase in consumer prices by 0.6% compared to the fourth quarter of 2016 and by 2.3% compared to the same period last year.

According to economists, the acceleration of inflation caused a sharp rise in prices for gasoline. The rise in prices in the long term is likely to remain slowed due to pressure from record low wages growth rates and deterioration of the labor market situation.

The fall in commodity prices in recent years, a fairly high level of unemployment in the country (the last 10 years, unemployment is close to 6.0%), a weak increase in wages of employees, which does not contribute to the growth of consumer spending, as well as weak, according to the RBA , GDP growth - these are the main risks for the Australian economy.

It is likely that interest rates will remain the same for some time.

Another factor put pressure on commodity currencies, including the Australian dollar, this week. The US decided to introduce import duties on wood from Canada. This news testifies to the strengthening of protectionism in world trade by the US, and this has a negative impact on commodity currencies.

Now investors will focus on Donald Trump's tax reform plan in the US, which he promised to present today. If the plan turns out to be clear in terms of dates and details, this could lead to an increase in the US dollar throughout the market.

On Thursday - the speech of the Governor of the RBA Philip Lowey. The exact time of his speech has not yet been determined. But, most likely, his speech will not contain anything new about the monetary policy of the RBA. It is likely that the comments of Philip Lowe will not affect the quotations of the Australian dollar.


Support and resistance levels

After the publication of inflation indicators, the pair AUD / USD declined during today's Asian session. During the last three trading sessions, the AUD / USD pair is declining. Today, the pair pushed away from the key resistance level 0.7535 (EMA200 on the daily chart) and with the opening of the European session, the decline in the AUD / USD pair continued.

Negative dynamics of the pair, it seems, is growing. The breakdown of support levels of 0.7475 (April lows and the lower border of the downward channel on the daily chart), 0.7460 (the Fibonacci level of a 23.6% correction to the wave of the pair's decline since July 2014) will increase the risks of return to the downtrend of the AUD / USD pair, which began in July 2014 of the year. The medium-term goal of this decline will be the level of 0.7155 (May and December minima of 2016).

The alternative scenario is related to the further weakening of the US dollar and the return of the pair AUD / USD above resistance levels 0.7535, 0.7570 (EMA200 and the top line of the descending channel on the 4-hour chart). If this scenario is implemented, the pair AUD / USD will grow with the targets of 0.7680, 0.7760, 0.7840 (the Fibonacci level of 38.2% correction to the fall wave of the pair from July 2014 and EMA144 on the weekly chart).

The medium-term positive dynamics of the AUD / USD pair may recover already when the AUD / USD pair returns to the zone above the 0.7535 level.

Support levels: 0.7475, 0.7460, 0.7330

Resistance levels: 0.7535, 0.7570, 0.7610, 0.7680, 0.7760, 0.7800, 0.7840



Trading Scenarios

Sell Stop 0.7480. Stop-Loss 0.7520. Take-Profit 0.7460, 0.7400, 0.7330

Buy Stop 0.7520. Stop-loss 0.7480. Take-Profit 0.7535, 0.7570, 0.7610, 0.7680, 0.7760, 0.7800, 0.7840

*) Actual and detailed analytics can be found on the Tifia website at tifia.com/analytics

 

[TifiaFX]

EuroStoxx50: European indices fell from the highs

27/04/2017

Current dynamics

Prior to the publication of the interest rate decision and the ECB's press conference, the major European stock indexes are declining from the new annual highs achieved 3 days ago after the victory of Macron in the first round of the presidential elections in France.

The decision on the interest rate of the ECB will be published at 11:45 (GMT). "The recovery of the Eurozone economy is still unstable, despite signs of improving the economic situation," - more recently, ECB executives commented on economists' forecasts about the possibility of raising interest rates and curtailing the QE program in the euro area.

The ECB's main interest rate is currently 0%, the deposit rate for commercial banks is negative and is -0.4%. From the beginning of April, within the framework of the QE program, the ECB plans to purchase European assets worth 60 billion euros by the end of 2017. It is widely expected that today the ECB will not take any action with regard to interest rates. At a subsequent press conference, ECB President Mario Draghi is likely to confirm the policy of maintaining the soft monetary policy of the bank. The press conference will begin at 12:30 (GMT).

It is unlikely that the ECB will go to change the QE program on the eve of the second stage of the presidential elections in France, which will be held on May 7. However, some economists believe that at the June meeting, the ECB may announce changes in the current QE program. The Eurozone economy is slowly but still recovering. So, according to the data published today, the confidence index in the industry of the Eurozone in April rose by 2.6 versus +1.3 in March, the index of trust in services in April was +14.2 versus +12.8 in March. The index of sentiment in the economy of the Eurozone in April rose to 109.6 against 108.0 in March, thus reaching its highest level since August 2007. However, unemployment still remains at high levels (about 9.5%), and annual inflation fell in March to 1.5% against 2% in February, again below the ECB's target level.

For the market, it will be a big surprise if Mario Draghi declares that it is possible to consider the issue of curtailing or changing the QE program in the direction of reducing support for the region's economy at the ECB's next meeting. The balance of the ECB at $ 4.5 trillion can surpass the Fed's balance already next week. Reducing the balance will be tantamount to a tightening of the monetary policy of the ECB. In this case, the euro will rise sharply, and European stock indexes will fly down. The situation with the elections in France in this case will take a back seat.

Nevertheless, according to most market participants, today Mario Draghi's rhetoric will remain unchanged soft, and interest rates will remain at the same level. The reaction of European indices to such a decision of the ECB is expected to be restrained-positive.


Support and resistance levels

After a sharp rise against the backdrop of Macro's victory in the first round of elections in France, the last three days the EuroStoxx50 index is gradually decreasing. The day before the EuroStoxx50 index reached new highs for the last more than 2.5 years near the mark of 3590.0. Through this level, now passes the upper limit of the newly formed upstream channel on the daily chart.

The OsMA and Stochastic indicators on the daily chart are still on the buyers’ side, however, on the 1-hour and 4-hour charts the indicators turned to short positions. It is likely that up to the second round of elections in France, the EuroStoxx50 index is unlikely to be able to update the recent highs near the 3590.0 mark.

The most likely scenario - the EuroStoxx50 index will remain in the range between the levels of 3515.0 (Fibonacci level 100% correction to the wave of decline since December 2015), 3590.0.

The breakthrough of support level 3440.0 (the lower border of the rising channel and EMA50 on the daily chart, EMA200 on the 4-hour chart) will open the way to further decrease of the EuroStoxx50 index with medium-term targets of 3325.0 (January highs), 3240.0 (EMA200 on the daily chart). The breakthrough to support level 3200.0 (the Fibonacci level of 61.8% correction to the wave of decline since December 2015) will "close" the upward trend of the EuroStoxx50 index.

If the positive dynamics return again, the EuroStoxx50 index will continue to rise in the uplink on the weekly chart, the upper limit of which passes near the level of 3680.0 (July highs of 2015).

Support levels: 3515.0, 3440.0, 3400.0, 3325.0, 3300.0, 3240.0, 3200.0

Resistance levels: 3590.0, 3600.0, 3680.0



Trading scenarios

Sell Stop 3540.0 Stop-Loss 3595.0. Take-Profit 3515.0, 3470.0, 3440.0, 3400.0, 3325.0, 3300.0, 3240.0

Buy Stop 3595.0. Stop-Loss 3540.0. Take-Profit 3610.0, 3680.0, 3700.0

*)Actual and detailed analytics can be found on the Tifia website at tifia.com/analytics

 

[TifiaFX]

NZD/USD: improvement of trade balance indicators

28/04/2017



Current dynamics

According to official data released on Friday, the state of trade balance of New Zealand in March compared with the same period last year improved. In March, the trade surplus amounted to NZ $ 332 million against the negative balance in February (-50 million NZ dollars). The improvement of the indicator was ensured by the growth of exports from New Zealand, primarily dairy and meat products to China. According to Tehsin Islam, a representative of the statistics department of the New Zealand government, "China remains to be the main buyer of our export goods, it accounts for a quarter of total exports of dairy products in value terms. In March, exports to China exceeded $ 1 billion New Zealand dollars for the first time since March 2014 ". Not surprisingly, the New Zealand dollar is so responsive to macro statistics from China.

Also on Friday came strong data on business optimism and business activity in New Zealand (11.0 and 37.7%, respectively) for April. Indicators of company confidence indicate a strong growth in the country's economy, which is growing for the eighth consecutive year.

Nevertheless, the New Zealand currency reacted poorly to the positive data presented in the morning. In the Asia-Pacific region, tensions are growing as the situation on the Korean Peninsula worsens. So, in a recent interview with Reuters, US President Donald Trump warned about the likelihood of a "major conflict" with North Korea. It is likely that, down to a reduction in tensions in the region, New Zealand and Australian dollars will be under pressure.

Also, commodity currencies came under pressure after earlier this week the US decided to introduce import duties on wood from Canada. This news testifies to the strengthening of protectionism in world trade by the US, and this has a negative impact on commodity currencies.

Today we are waiting for data from the USA. At 12:30 (GMT) a report on GDP for the first quarter (preliminary release) is published. A strong report will positively affect the quotations of the US dollar, including in the pair NZD / USD. According to the forecast, the US annual GDP grew by 1.3% in the first quarter (against 2.1% in the previous quarter). Also at this time, published indices of expenditures on personal consumption, which are important indicators of inflation and the price index of GDP for the first quarter.

At 13:45 (GMT) Chicago PMI is published with an assessment of economic activity in the states of Illinois, Indiana and Michigan, and at 14:00 - consumer confidence index from the University of Michigan in April.

In view of the importance of the data, a surge in volatility in the foreign exchange market is expected at the time of publication. The dynamics of the US dollar and the major dollar pairs in this period of time will depend entirely on macro statistical indicators for the United States.

It is also necessary to take into account that today is the last business day of the week and month before the long weekend (on Monday - bank holiday in view of the celebration of Labor Day on May 1). It is possible to fix long positions of the dollar against commodity currencies, which will cause the growth of their quotations against the US dollar, including in the pair NZD / USD.


Support and resistance levels

With the opening of today's trading day, the pair NZD / USD continued to decline, despite the "positive dose" from New Zealand. At the moment, the pair NZD / USD is trading at a strong support level of 0.6860 (Fibonacci level of 23.6% of the upward correction to the global wave of decline of the pair from the level of 0.8800, which began in July 2014). At this level are also the minimums of December 2016, and the lower border of the descending channel passes on the daily chart.

The strong negative impulse predominates, and the OsMA and Stochastic indicators on the daily and weekly charts recommend short positions.

From this level it is possible, however, as a retreat, and its breakdown with the acceleration of the descending dynamics.

In case of rebound from the level of 0.6860, the pair NZD / USD may return to the depth of the descending channel with the prospect of growth to the levels of 0.6990 (EMA200 on the 4-hour chart), 0.7050 (EMA200 on the daily chart). Between these levels, just the upper limit of the descending channel passes on the daily chart. The beginning of the implementation of this scenario will be connected with the breakdown of the nearest resistance levels 0.6890, 0.6918.

In case of breakdown of the support level of 0.6860, the global downtrend of the NZD / USD pair, which began in July 2014, will resume. The minima of the wave of this trend are close to the level of 0.6260, which were reached in September 2015, and from which the current upward correction began. The level of 0.6860 is the key level (the Fibonacci level is 23.6%) in this correction.

An alternative scenario for the medium-term growth of the NZD / USD pair will be possible only after the pair is consolidated above the key resistance level 0.7050 (EMA200 on the daily chart).

Below this level, the negative dynamics of the pair NZD / USD prevails.


Support levels: 0.6860, 0.6800, 0.6680

Resistance levels: 0.6890, 0.6918, 0.6990, 0.7050



Trading Scenarios

Sell Stop 0.6850. Stop-Loss 0.6910. Take-Profit 0.6800, 0.6700, 0.6680

Buy Stop 0.6910. Stop-Loss 0.6850. Take-Profit 0.6920, 0.6990, 0.7050

*) Actual and detailed analytics can be found on the Tifia website at tifia.com/analytics

 

[TifiaFX]

Brent: prices are falling again

02/05/2017



Current dynamics

According to the data published on Friday from the American oil service company Baker Hughes, the number of oil drilling rigs in the US increased by 9 units to 697 units last week. Thus, almost continuously increasing, the number of active drilling oil rigs in the United States has now reached a level almost two times higher than the minimum marked more than a year ago. The observed sustained recovery of shale oil production in the US substantially negates the effect of OPEC efforts to reduce production and create an artificial deficit in the oil market. At the same time, US oil companies have significant reserve capacity. Despite the increase in drilling activity this year, while only about 70% of existing drilling rigs work. The risks of additional increase in oil production in the US are very significant. According to the forecast of the International Energy Agency (IEA), oil production in the US by the end of this year will grow by 680,000 barrels per day compared with the end of 2016.

At the same time, production in non-OPEC countries is increasing. So, on Monday in the Libyan oil company National Oil Corp. Said that production had peaked since 2014, rising to a level of 760,000 barrels per day.

As a result of yesterday, futures for Brent crude on ICE Futures fell in price by 1.02% to 51.52 dollars per barrel.

Oil production outside OPEC, according to the IEA, this year may increase by 485,000 barrels per day. Reserves of oil in world storage facilities are still significantly higher than average 5-year levels.

All this raises doubts among investors that OPEC will prolong the period of production reduction at the next meeting of the cartel, which will be held on May 25. If the agreement is extended, it will support oil prices in the second half of the year.

If not, the oil market could collapse and again quickly return to the lows of 2016, when a barrel of Brent crude oil was worth about 27.00 dollars.

Today at 20:30 (GMT), the American Petroleum Institute (API) publishes a weekly report with data on oil reserves and four major petroleum products: gasoline, kerosene, distillates and fuel oil in US storage. Another increase in stocks is expected, which will negatively affect oil prices. Previous value: +0.897 million barrels.


Support and resistance levels

During the last seven trading sessions, the price for Brent crude oil broke through the most important short- and medium-term support levels of 52.60 (EMA200 on 1-hour, EMA144 on the daily chart), 51.90 (EMA200 on the daily chart).

At the beginning of today's European session, the spot price for Brent crude oil is close to $ 51.50 per barrel, through which the bottom line of the rising channel and EMA50 pass on the weekly chart. Breakdown of this level of support will significantly increase the growing negative trend.

Indicators OsMA and Stochastics on the weekly, daily, 4-hour charts went to the side of sellers.

In the case of a confirmed breakdown of the support level of 50.70 (the Fibonacci retracement level of 61.8% of the correction to decrease from the level of 65.30 from June 2015 to the absolute minimums of 2016 near the 27.00 mark) and fixing below the level of 50.00, the upward trend in the price of Brent crude oil will be canceled.

An alternative scenario for growth is associated with a return of the price above the level of 52.60 and further growth in the uplink on the daily chart. The upper boundary of this channel passes near the level of 57.50 (the highs of the year).

So far, negative dynamics prevails.

Support levels: 51.00, 50.70, 50.00

Levels of resistance: 51.90, 52.60, 53.40, 55.60, 56.70, 57.00, 57.50



Trading Scenarios

Sell Stop 51.30. Stop-Loss 52.10. Take-Profit 51.00, 50.70, 50.00, 49.50

Buy Stop 52.10. Stop-Loss 51.30. Take-Profit 52.60, 53.40, 55.60, 56.70, 57.00, 57.50

*) Actual and detailed analytics can be found on the Tifia website at tifia.com/analytics

 

[TifiaFX]

NZD/USD: wage growth still weak

03/05/2017


Current dynamics

After yesterday (22:45 GMT) the Bureau of Statistics of New Zealand published strong data on the state of the labor market in the country, the New Zealand dollar rose in the foreign exchange market. The unemployment rate in New Zealand in the first quarter decreased more than expected (4.9% against the forecast of 5.2% and the same level in the 4th quarter of last year). The NZD / USD pair jumped 0.5% or 33 points at the time of publication of the data, however, then declined just as rapidly and at the beginning of today's European session it was already trading near the opening level of 0.6933.

According to market participants, although unemployment levels are lower than expected, the Reserve Bank of New Zealand will not rush to raise interest rates. The unemployment rate of 4.9% corresponds to the forecast of the central bank published earlier this year. At the same time, the employment report released today points to a weak wage growth.

Also, the RBNZ is concerned about the recent decision by the US to introduce import duties on wood from Canada. This news is evidence of increased protectionism in world trade by the US, and this has a negative impact on commodity currencies, including the New Zealand dollar.

It is likely that at the meeting scheduled for the next week (May 10), RBNZ will not change its forecast of the dynamics of interest rates. It is expected that the RBNZ will start raising rates not earlier than 2019.

At the same time, the attention of traders will be riveted to today's Fed decision on the interest rate, which will be published at 18:00 (GMT). The probability that the Fed will raise the rate today is about 5%, according to the CME Group. Investors will follow the accompanying comments. The US central bank will report its assessment of the economic situation and may signal the prospects for interest rates for the coming months. The press conference of the chairman of the FRS, Janet Yellen will not. She will speak later on Friday.

The Fed statement may contain information on the probability of an increase in the key rate at the next meeting, which will be held on June 13-14. The probability of the June increase is estimated at 71%, and market participants expect two more interest rate hikes this year. Also, the Fed may signal that it will start cutting its portfolio of bonds and other assets already in September, which now amounts to about $ 4.5 trillion. All this can dramatically strengthen the position of the US dollar, if, of course, the Fed today will say what it expects market participants.


Support and resistance levels

With the opening of today's trading day, the pair NZD / USD has risen sharply on positive data from the New Zealand labor market. During the European session, the NZD / USD pair resumed its decline. At the moment, the pair NZD / USD is trading at the short-term support level of 0.6930 (EMA200 on the 1-hour chart), however, OsMA and Stochastic indicators moved to the sellers' line on the 1-hour and 4-hour charts. The pair NZD / USD was unable to develop an upward movement above the level of 0.6970.

There is probably a second test of support level 0.6860 (Fibonacci level of 23.6% of the upward correction to the global wave of decline of the pair from the level of 0.8800, which began in July 2014). At this level are also the minimums of December 2016, and the lower border of the descending channel passes on the daily chart.

The negative impulse predominates. In case of breakdown of the support level of 0.6860, the global downtrend of the NZD / USD pair, which began in July 2014, will resume. The minima of the wave of this trend are close to the level of 0.6260, which were reached in September 2015, and from which the current upward correction began. The level of 0.6860 is the key level (the Fibonacci level is 23.6%) in this correction.

In case of rebound from the level of 0.6860, the pair NZD / USD may return to the depth of the descending channel with the prospect of growth to the levels of 0.6980 (EMA200 on the 4-hour chart), 0.7050 (EMA200 on the daily chart, the upper limit of the descending channel on the daily chart).

The scenario for the medium-term growth of the NZD / USD pair will be possible only after the pair is consolidated above the key resistance level of 0.7050. Below this level, the negative dynamics of the pair NZD / USD prevails.

Support levels: 0.6918, 0.6890, 0.6860, 0.6800, 0.6680

Resistance levels: 0.6980, 0.7050



Trading Scenarios

Sell in the market. Stop-Loss 0.6970. Take-Profit 0.6900, 0.6890, 0.6860, 0.6800, 0.6680

Buy Stop 0.6970. Stop-Loss 0.6910. Take-Profit 0.7000, 0.7050

*) Actual and detailed analytics can be found on the Tifia website at tifia.com/analytics

 

[TifiaFX]

EUR/USD: The Fed kept interest rates at the same level

04/05/2017

Current dynamics

As it became known, during the two-day meeting, the Fed kept interest rates at the same level, in the range of 0.75% -1.00%. The decision was taken unanimously, by 9 votes out of 9.

The leaders noted the observed slowdown in US economic growth since the beginning of the year, but characterized it as having a "temporary nature." The decision of the Fed was expected. Now, market participants with a probability of 75% expect a rate increase at the June meeting of the Fed (June 13-14).

The dollar responded with growth to the decision of the Fed and continued to increase after the publication of the decision. Despite the fact that yesterday the EUR / USD fell by 4%, losing almost 100 points, today the EUR / USD pair has fully recovered at the beginning of the European session.

Portion of positive from the Eurozone in the form of macroeconomic statistics, received at the beginning of the European session, allowed the euro to strengthen its position in the foreign exchange market.

Retail sales in the Eurozone in March, according to updated data, increased by 0.3% (+ 2.3% in annual terms). Data on retail sales for February were also revised upwards: to + 0.5% (+ 1.7% in annual terms). The composite index of purchasing managers (PMI) of the Eurozone for April was revised upwards to 56.8 from 56.7. In March, the index was 56.4, and in April reached a 6-year high.

During yesterday's European trading session (at 09:00 GMT), data on the Eurozone's GDP (preliminary value) for the first quarter were published. The GDP growth was + 0.5% (+ 1.7% in annual terms), which coincided with the forecast.

It is unlikely that the data presented will have an impact on the leadership of the ECB, which considers the growth of the Eurozone economy still weak enough to begin curtailing the QE program in the Eurozone. Unemployment in the Eurozone remains at 9.5%, while inflation is still below the ECB's target level (just under 2.0%).

As you know, at the end of last month, the ECB kept interest rates at the same level (the ECB's main interest rate is 0%, the deposit rate for commercial banks is negative and is -0.4%). As the head of the ECB, Mario Draghi, stated at the next press conference, "the incoming data strengthen our confidence that the observed economic growth will continue to strengthen and expand," however, "the risks ... are still shifted downwards, and they are connected, first of all , with global factors ".

Today (at 16:30 GMT) ECB President Mario Draghi will start the speech. Volatility in EUR trades could rise sharply in the course of his speech. Mario Draghi is able to unfold the markets, especially if his speech touches on the subject of the monetary policy of the ECB.


Support and resistance levels

After the first round of the presidential elections in France, the pair EUR / USD continues to remain in the range, mainly between the levels of 1.0850, 1.0950. The EUR/USD is also above the short-term support level 1.0875 (EMA200 on the 1-hour chart).

Positive short-term dynamics of the EUR / USD pair prevails above this level, as evidenced by the OsMA and Stochastic indicators on 1-hour, 4-hour, daily, weekly charts.

Also above the support level 1.0800 (EMA200 on the daily chart), medium-term positive dynamics is also preserved. The EUR/USD is at the top of the rising channel on the daily chart, its upper limit runs between the levels of 1.0950, 1.1000.

The recent positive macroeconomic data from the Eurozone stimulate the growth of the number of euro buyers. If on Sunday Macron wins the final victory in the second round of the presidential elections in France, then the euro's positions will significantly strengthen in the currency market, including the EUR / USD pair.

In case of breakdown of the levels of 1.0950, 1.1000, the pair EUR / USD may go to resistance levels 1.1280 (Fibonacci level of 23.6% of corrective growth from the minimums reached in February 2015 in the last wave of global decline from 1.3900), 1.1340 (EMA144 on the weekly chart).

An alternative scenario for a reduction in the medium term will become relevant if the EUR / USD pair returns to the support level of 1.0800. The targets for the decline will then be levels 1.0770 (EMA144 on the daily chart), 1.0630 (bottom line of the uplink on the daily chart), 1.0580 (April lows), 1.0530, 1.0500.

Development of such a scenario will also contribute to the systematic implementation of the decisions of the Fed on a gradual increase in the interest rate in the US and a reduction in the balance of the Fed.

Support levels: 1.0875, 1.0850, 1.0800, 1.0770, 1.0700, 1.0630, 1.0580, 1.0530, 1.0500

Levels of resistance: 1.0950, 1.1000, 1.1200, 1.1280, 1.1340



Trading Scenarios

Sell Stop 1.0870. Stop-Loss 1.0910. Goals 1.0850, 1.0800, 1.0770, 1.0700, 1.0630, 1.0580, 1.0500

Buy Stop 1.0960. Stop-Loss. Goals 1.1000, 1.1200, 1.1280, 1.1340

*) Actual and detailed analytics can be found on the Tifia website at tifia.com/analytics

 

[TifiaFX]

USD/CAD: focus on US labor market data

05/05/2017



Current dynamics

The unconditional center of attention of investors today is the publication of data from the US labor market scheduled for 12:30 (GMT) for April. It is expected that unemployment in April rose by 0.1% to 4.6%, the number of new jobs created outside agricultural production increased by 185 000 (after rising by 98 000 in March). At the same time, the average hourly wage increased by 0.3% (against + 0.2% in March). In general, the data can be called positive. On them, the US dollar, subject to confirmation of the forecast, can receive an additional impetus for growth. Positive data will also give more credibility and confidence to Fed Chairman Janet Yellen, who will begin her speech today in the second half of the US trading session.

As you know, on Wednesday the Fed kept interest rates in the range of 0.75% - 1.0%. The Fed noted that despite the slowdown in US economic growth since the beginning of the year, annual inflation "is close to the target level of 2%," job growth is "strong," and the labor market situation continues to improve. Thus, short-term risks for the economic outlook, in the opinion of the leaders of the Fed, are "generally balanced." Although no new statements have been made about the balance, the Fed is still planning to continue a gradual rate hike.

So far, everything is in favor of the US dollar and against commodity prices, which are denominated in US dollars, as well as against commodity currencies, including the Canadian dollar.

In recent days, there has been a sharp drop in commodity prices. On the Chinese Commodity Exchange, the price of iron ore fell by 8%, and nickel prices retreated to almost a 1-year low in London, copper prices in the US also fell sharply. But most striking is the sharp drop in the price of oil, which has declined by 13% since mid-April.

Speaking in Mexico City yesterday, the chairman of the Bank of Canada Poloz said that US trade policy is a "significant problem" in drawing up economic plans. Apparently, he also had in mind the recent decision by the US to introduce import duties on wood from Canada. "It's no surprise that when there is a threat of trade protectionism, companies do not want to invest in expansion," Poloz said. The risk of protectionism in the US "limits economic growth."

Today, along with the publication of data from the labor market in the United States at 12:30 (GMT) will be published data on the labor market in Canada for April. It is expected that unemployment remained at the same level of 6.7%, and the number of employed increased by 10 000 people. And at 14:00, the Ivey Business Activity Index (PMI), which is an important indicator of the Canadian market and economy, will be published. The figure above the value of 50 is considered a positive factor for CAD. The previous value of the indicator is 61.1, the forecast is 62.3.

In the conditions of a sharp fall in oil prices, it is not necessary to speak about the growth of quotations of the Canadian dollar, which has a correlation with the oil price of about 92%.

The dynamics of the pair USD / CAD today will depend wholly on the dynamics of the US dollar, which has recently strengthened significantly against commodity currencies.

It is not superfluous, perhaps, to recall the sharp increase in volatility during the American trading session, especially at 12:30 (GMT).


Support and resistance levels

Pushed back in the middle of last month from the support level 1.3225 (EMA200 on the daily chart at that time), the pair USD / CAD is growing rapidly in the upward short-term channel on the 4-hour chart. Indicators OsMA and Stochastics on the monthly, weekly, daily, 4-hour charts recommend long positions and signal a strong upward impulse.

An important resistance level 1.3680 (Fibonacci level of 23.6% of the downward correction to the pair's growth since the beginning of July 2014 and the level of 1.0650) is breached. The pair USD / CAD is growing positive dynamics.

There are all the prerequisites of a fundamental nature for the further growth of the US dollar against commodity currencies, including against the Canadian dollar.

The medium-term growth prospect opens up to the level of 1.4600 (highs of 2016 and the last global wave of pair growth since July 2014).

An alternative scenario for a decline in the medium term will only be relevant if the pair USD / CAD is returned to the zone below the support level 1.3300 (the current position of EMA200 on the daily chart).

Much in the dynamics of the pair USD / CAD in the medium term will depend, first of all, on the dynamics of the US dollar and oil prices, which are likely to continue to decline until the OPEC meeting on May 25, at which the issue of extending the agreement for the next half year On the reduction of oil production.


Support levels: 1.3680, 1.3590, 1.3510, 1.3300, 1.3225, 1.3100, 1.3010

Resistance levels: 1.3800, 1.3940, 1.4000



Trading Scenarios

Buy Stop 1.3795. Stop-Loss 1.3745. Take-Profit 1.3850, 1.3900, 1.3940, 1.04000

Sell Stop 1.3745. Stop-Loss 1.3795. Take-Profit 1.3680, 1.3590, 1.3510, 1.3300

*) Actual and detailed analytics can be found on the Tifia website at tifia.com/analytics

 

[TifiaFX]

Brent: the number of active drilling rigs in the United States has again risen

08/05/2017



Current dynamics

The general weakening of the US dollar, observed on Friday, helped the oil prices to adjust at the end of last week. The price of Brent oil after reaching a new local minimum during the Asian session of Friday near the level of 46.70 dollars per barrel could grow by the end of the American trading session to the level of 49.69. The price increase on Friday continued even after the data from the American oil service company Baker Hughes were published. The number of active oil drilling rigs in the US increased again last week (by 6 units to 703 units).

The victory of Emmanuel Macron in the French presidential election helped to ease concerns about the prospects of the European economy. The investors' mood also improved the information that Saudi Arabia will support the extension of OPEC arrangements with the participation of Russia and other major oil-producing countries on the reduction of production.

Nevertheless, some investors still doubt that a reduction in production will lead to a rapid and significant reduction in world reserves.

The growth in the production of shale oil in the US significantly alleviates OPEC's efforts to create an artificial deficit and stabilize prices in the oil market. Moreover, the US is increasing its oil exports to Asia. Approximately 40% of US oil exports were sent to Asia in February. At the same time, US oil companies have significant reserve capacity.

Last month, the EIA raised its forecast for oil production this year and next year to 9.2 million barrels per day and 9.9 million barrels per day, respectively. Against the backdrop of the growth of active drilling rigs the last three months production in the US remains above 9 million barrels per day.

On Tuesday, a monthly report is expected from the Energy Information Administration (EIA) with a short-term forecast on the dynamics of oil production in the US. It is expected that EIA will again raise the forecast for oil production in the US, which could significantly worsen the mood of investors and increase the pressure on prices.

But the main current risks are connected, first of all, with the extension of OPEC agreements on oil production reduction. If the agreement on limiting production is not extended (the OPEC meeting will be held on May 25), the oil market may again rapidly return to the lows of 2016, when the barrel of Brent crude oil was just above $ 27.00.


Support and resistance levels

Since the middle of last month, the price for Brent crude oil has fallen sharply and has lost almost 15% to the current moment. Negative dynamics prevails. The price of Brent crude oil broke through the most important mid-term support levels of 52.45 (EMA144 on the daily chart), 51.70 (EMA200 on the daily chart, EMA50 and the bottom line of the uplink on the weekly chart), 50.70 (Fibonacci retracement level of 61.8% From June 2015 to the absolute minimums of 2016 near the mark of 27.00) and decreases in the descending channel on the 4-hour chart.

In case of repeated testing of the support level of 48.35 (the bottom line of the descending channel on the daily chart), the price reduction may resume.

Indicators OsMA and Stochastics on the monthly, weekly, daily charts went to the side of sellers.

In the case of consolidation below 46.20 (50% Fibonacci level), the upward trend in the price of Brent crude oil will be canceled.

An alternative scenario for growth is associated with a price return above the level of 52.45. So far, there has been a strong negative dynamics.

Support levels: 48.35, 48.00, 47.10, 46.20

Levels of resistance: 50.00, 50.70, 51.70, 52.45



Trading scenarios

Sell Stop 48.90. Stop-Loss Section 50.10. Take-Profit 48.35, 48.00, 47.10, 46.20

Buy Stop 50.10. Stop-Loss 48.90. Take-Profit 50.70, 51.70, 52.45, 55.60, 56.70, 57.00, 57.50

*) Actual and detailed analytics can be found on the Tifia website at tifia.com/analytics

 

[TifiaFX]

USD/JPY: US government bond yield growth supports dollar

10/05/2017

Overview and dynamics

As the financial and geopolitical tensions in the world decrease (the elections in France, the election of a new president in South Korea, which prioritizes the establishment of relations with the northern neighbor), the monetary policy of the Fed is again on the forefront, aimed at its gradual tightening.

Increase in the propensity of investors to risk is caused by the sale of assets-shelters, such as gold, yen, as well as US government bonds. On Tuesday, the yield of 10-year US government bonds rose to the highest level in more than a month. The index of the dollar WSJ (reflecting the value of the US dollar against the basket of 16 other currencies) increased by 0.3%, to 90.52.

Investors again focus their attention on the high probability of an interest rate increase in the US already in June. The probability of such an increase, according to the CME Group, is approximately 88%.

As the president of the Federal Reserve Bank of Dallas Robert Kaplan stated yesterday, the basic scenario of the Fed envisages three higher interest rates this year. According to Kaplan, raising rates should continue "gradually and patiently." The president of the Federal Reserve Bank of Cleveland, Loretta Mester, also said yesterday that the Fed should not lag behind the schedule for raising interest rates.

With an increase in interest rates, the US dollar becomes more attractive to investors seeking profitability. Now, because of the rapid increase in rates and the possible reduction in the Fed's balance among investors, there is concern that this year there may be a shortage of the US currency.

Concern over Trump's policy and the presidential elections in France is gradually dying out, and strong US macroeconomic data is helping the US dollar recover in the foreign exchange market.

After positive data from the US labor market published on Friday, it is worth paying attention to important data on retail sales and inflation in the US, which are published this Friday at 12:30 (GMT). These data will help the Fed better understand the state of the country's economy. A moderate increase in inflation is expected in April, which will positively affect the US dollar.

Against the backdrop of the strengthening of the "hawkish" position of the Fed on the monetary policy in the US, other major world central banks demonstrate a tendency to pursue a soft monetary policy. In late April, the Bank of Japan kept its monetary policy unchanged. Despite the fact that, according to the bank, the outlook for the economy has improved, inflation still lags behind the forecasts. The bank lowered the inflation forecast for this fiscal year to 1.4% against 1.5% earlier. The forecast for the next financial year remained unchanged at 1.7%.

The Board of the Bank of Japan voted for the preservation of the target level of 10-year government bonds at a zero mark, for maintaining the key rate at the level of -0.1%, and confirmed that the bank will continue to purchase government bonds worth 80 trillion yen per year. The Bank of Japan filed a clear signal that the possibility of raising rates was not yet being considered and that he would continue to pursue an extra soft monetary policy.

Most economists believe that the Bank of Japan will not take any action during the entire fiscal year 2017. The manager of the Bank of Japan Kuroda said today that the weak yen is a plus for capital spending, employment in Japan.

Thus, there is a clear divergence in the direction of the monetary policies of the Bank of Japan and the Fed, which will be the main driver of the pair USD / JPY for the near future.


Technical analysis

At the beginning of the month, the pair USD / JPY pushed back from the support level of 111.15 (EMA200 on the daily chart), and having broken through an important resistance level of 113.00 (Fibonacci level of 50% correction to the pair growth since August of last year and the level of 99.90, as well as the upper limit of the downward channel on Day chart), develops an upward trend.

On the weekly chart, a new ascending channel was formed, with the upper boundary passing near the level of 125.65 (highs of June 2015). If the growth continues, the level of 125.65 will be a long-term target for the pair USD / JPY. Medium-term goals within this upward channel are 116.00 (Fibonacci level 61.8%), 118.60 (December and January highs), 121.30 (February and November highs).

The alternative scenario will be associated with the breakdown of the support level 113.00 and the return of the pair USD / JPY in the downward channel on the daily chart. The objectives of the decline are levels 111.70 (EMA200 on the 4-hour chart), 111.15 (EMA200 on the daily chart). In case of breakdown of the support level 110.10 (Fibonacci level 38.2%), the negative dynamics of the pair USD / JPY will increase. The closest targets in this case will be the levels of 108.25 (EMA200 on the weekly chart and April lows), 106.50 (the Fibonacci level of 23.6%), the breakdown of which will finally return the pair USD / JPY in a downtrend.

So far, the positive dynamics of the pair USD / JPY is dominating. Preferred are the long positions.

Support levels: 113.00, 112.60, 111.70, 111.15, 110.90, 110.10, 109.00, 108.25, 106.50

Resistance levels: 114.00, 115.00, 116.00



Trading recommendations

Buy Stop 114.35. Stop Loss 113.60. Take-Profit 115.00, 116.00, 117.00, 118.60

Sell Stop 113.60. Stop Loss 114.35. Take-Profit 113.00, 112.60, 111.70, 111.15, 110.90, 110.10, 109.00, 108.25, 106.50

*) Actual and detailed analytics can be found on the Tifia website at tifia.com/analytics

 

[TifiaFX]

USD/CAD: amid rising oil prices

11/05/2017



Current dynamics

According to data provided yesterday by the US Department of Energy, commercial oil reserves in the US fell by 5.247 million barrels in the week of April 29-May 5. Oil reserves in the US declined for the fifth week in a row, and this is the largest weekly decline this year. The forecast assumed a drop in inventories of 1.786 million barrels. The prices for oil in response to this message reacted with a sharp increase.

Commodity currencies, and above all, the Canadian dollar, have been supported by rising oil prices. The pair USD / CAD lost 40 points at the time of publication of this data, and the end of yesterday's trading day was already near the mark of 1.3650, which is almost 0.5% lower than the level of yesterday's trading day opening. At the beginning of today's trading day, the pair USD / CAD again rose, largely recouping yesterday's decline.

According to analysts of the oil market, the surplus of oil reserves in the world is still high. As expected, OPEC should extend or agree on a stronger production cut on May 25. If such an agreement is reached, then oil prices, and together with them, commodity currencies (including the Canadian dollar) will receive strong support. The expected OPEC agreement on the extension of agreements to reduce oil production is a strong "bearish" factor for the pair USD / CAD. The expected increase in the June Fed meeting (June 13-14) of the interest rate in the US is a strong “bullish” factor for the pair USD / CAD. As stated yesterday by the president of the Federal Reserve Bank of Boston, Eric Rosengren, "three increases in rates are justified during the current year, provided that the economy will grow in line with the forecasts".

Thus, the pair USD / CAD is on a kind of "balance of weights", and much will depend both on the decisions of the Fed and OPEC, as well as on accompanying statements. To determine the direction of further movement, the pair needs fundamental drivers.

From the news for today we are waiting for data from the USA and Canada. At 12:30 (GMT) will be presented:

• US data - Producer Price Index (PPI), which estimates the average change in wholesale prices determined by manufacturers at all stages of manufacturing. A high result strengthens the US dollar, low - weakens. Forecast: in April the index rose to 0.2% (against -0.1% in March); A weekly report from the US Department of Labor, containing data on the number of initial applications for unemployment benefits. The result above the expected indicates a weak labor market, which has a negative impact on the US dollar. The forecast is expected to increase to 245,000 versus 238,000 for the previous period, which should negatively affect the dollar;

• data for Canada - the price index for new housing for March. The high value of the indicator is a positive factor for CAD, and a low value is negative. Forecast: prices in March rose by 0.2%. At 14:30 (GMT) the quarterly report from the Bank of Canada is published, containing information on the state of the Canadian economy and the bank's policy.

Thus, during the publication of data (12:30 and 14:30 GMT), volatility in the USD / CAD pair is expected to grow.


Support and resistance levels

Since the beginning of the month, the pair USD / CAD is trading, basically, in the range between the levels 1.3750, 1.3650. Through the 1.3680 mark, at which the pair USD / CAD is trading in the middle of today's European session, the Fibonacci level is 23.6% (the downward correction for the pair's growth since early July 2014 and the 1.0650 mark) and EMA200 on the 1-hour chart.

Indicators OsMA and Stochastics on the 1-hour, 4-hour, daily charts were deployed to short positions.

In the event of a breakdown of the support level of 1.3680, the downside target will be support levels 1.3650, 1.3590 (November highs, December highs).

Nevertheless, there are all the prerequisites of a fundamental nature for the further growth of the US dollar against commodity currencies, including against the Canadian dollar.

The pair USD / CAD remains significantly above the key support level 1.3300 (EMA200 on the daily chart) in the uplink on the daily chart, the upper limit of which is near the 1.3900 level.

Much in the dynamics of the pair USD / CAD in the medium term will depend, first of all, on the dynamics of the US dollar and oil prices.

Support levels: 1.3680, 1.3650, 1.3590, 1.3510, 1.3300

Resistance levels: 1.3700, 1.3750, 1.3800, 1.3900, 1.3940, 1.4000



Trading Scenarios

Buy Stop 1.3715. Stop-Loss 1.3670. Take-Profit 1.3750, 1.3800, 1.3850, 1.3900, 1.3940

Sell Stop 1.3670. Stop-Loss 1.3715. Take-Profit 1.3590, 1.3510, 1.3300

*) Actual and detailed analytics can be found on the Tifia website at tifia.com/analytics

 

[TifiaFX]

Brent: 2 key support levels 51.70, 50.70

12/05/2017

Current dynamics

After on Wednesday the US Energy Ministry presented data on commercial oil and petroleum products in the US for the previous week, oil prices rose sharply. Reserves in the US, contrary to forecasts, fell by 5.247 million barrels. This was the largest weekly decline this year. And the oil reserves in the US are declining for the fifth consecutive week.

Yesterday, the price of Brent oil on the positive received an attempt to break through the resistance level at 50.70 (the Fibonacci level of 61.8% correction to the decline from the level of 65.30 from June 2015 to the absolute minimums of 2016 near the 27.00 mark). However, the attempt failed, and Brent crude oil traded today in a narrow range near the mark of 50.70 dollars per barrel.

The optimism of the participants in the oil market also increased after the OPEC report, which showed that members of the cartel adhere to the established quotas. As expected, OPEC should extend or agree on a stronger production cut on May 25. If such an agreement is reached, oil prices will receive strong support. It seems that oil futures will finish the week with a rise of more than 3%, if the overall positive picture again does not spoil the report from the American oil service company Baker Hughes, which will be published today closer to the end of the US trading session (18:00 GMT). The number of active oil drilling rigs in the US earlier rose again (by 6 units to 703 units). The next growth will negatively affect oil prices.

According to analysts of the oil market, the surplus of oil reserves in the world is still high. OPEC raised its forecast for growth in oil production outside the cartel in 2017 to 950,000 barrels per day. Accelerating production in the US, Brazil, Canada, as well as Nigeria and Libya, which are part of OPEC, largely alleviates OPEC's efforts to create an artificial deficit in the oil market and stabilize oil prices.

At the same time, OPEC understands that oil producers in the above countries take the market share from the cartel, which is narrowing due to a decrease in oil production, which occurs within the framework of the OPEC agreement.

If the agreement on limiting production is not extended (the OPEC meeting will be held on May 25), the oil market may again rapidly return to the lows of 2016, when the barrel of Brent crude oil was just above $ 27.00.

From the news for today, also waiting for data on inflation in the US. At 12:30 (GMT) will be published data on retail sales and consumer price indices for April, which are one of the main inflation indicators in the US. A high result will strengthen the US dollar, and vice versa, a low result will weaken the USD. The forecast: + 0.6% (against -0.2% in March) and + 0.3% (against -0.3% in March), respectively. Evidence of accelerating inflation will increase the likelihood of an increase in interest rates by the US Federal Reserve System.

In this case, the attractiveness of the dollar for investors will grow, while prices for oil and other commodities, denominated in US dollars, will fall.


Support and resistance levels

Since the middle of last month, the price of Brent crude oil has fallen sharply and has lost almost 12% to the current moment. The negative dynamics prevails while the price is below the levels 51.70 (EMA200 on the daily chart), 50.70 (Fibonacci level 61.8% correction to the decline from the level of 65.30 from June 2015 to the absolute minimums of 2016 near the 27.00 mark).

On the daily chart, a downward channel formed, the lower boundary of which passes near the support level of 46.20 (50% Fibonacci level).

In the event of a breakout of the level of 50.70, the price that is currently at this level will rush down to levels 48.35, 47.10, 46.20. In the case of consolidation below 46.20 (50% Fibonacci level), the upward trend in the price of Brent crude oil will be canceled.

An alternative scenario for growth is associated with a return of the price above the level of 52.45 (EMA144 on the daily chart). So far, negative dynamics prevails.

Support levels: 50.70, 48.35, 47.00, 46.20

Resistance levels: 51.70, 52.45



Trading scenarios

Sell Stop 50.50. Stop-Loss 51.25. Take-Profit 50.00, 48.35, 48.00, 47.10, 46.20

Buy Stop 51.25. Stop-Loss 50.50. Take-Profit 51.70, 52.45, 55.60, 56.70, 57.00, 57.50

*) Actual and detailed analytics can be found on the Tifia website at tifia.com/analytics

 

[TifiaFX]

FTSE100: Positive dynamics of the index persists

15/05/2017



Current dynamics

After in April British Prime Minister Theresa May unexpectedly announced early parliamentary elections the British stock market collapsed. The index of the London stock exchange FTSE100 has lost almost 2.9%. It was followed by all European major stock indexes. Early general elections in the UK would allow Prime Minister Theresa May to consolidate the dominant position of the Conservative Party in parliament on the eve of the June elections in order to negotiate with the EU on more favorable conditions for Brexit.

Despite the collapse in April, the FTSE100 index was able not only to recover completely, but to exceed the annual absolute maximum recorded in March near the 7447.0 mark.

At the beginning of today's European session, the FTSE100 index is declining; however, it is still in positive territory, trading near the 7444.0 mark with a rise after more than 1200 points (+ 19%) in the referendum on Brexit at the end of June.

The focus of traders will be today the speech of British Prime Minister Theresa May, which will begin at 19:00 (GMT). It is necessary to take into account the possibility of a sharp increase in volatility during the speech of Theresa May.

It is also worthwhile to be careful when opening trading positions tomorrow, when at 08:30 (GMT) inflation data are published in the UK for April. As expected, annual inflation accelerated to 2.6% from 2.3% in the previous month. The sharp increase in inflation in the country, gives grounds to assume that the Bank of England can again return to consideration of the question of raising the interest rate in the UK. And this is a negative factor for the British stock market.

Nevertheless, weak wage growth rates in the UK, which are lagging behind the rate of inflation in the country, can cause the British to cut their spending, which in turn can cause a slowdown in the national economy.

For this reason, the Bank of England will refrain from tightening monetary policy in the country, which is a positive factor for the British stock market. If the inflation data published in the UK tomorrow is below the forecast (+ 0.4% in April and + 2.6% in annual terms), the FTSE100 index will respond with growth.


Support and resistance levels

By mid-March, the FTSE100 index rose to its maximum near the 7447.0 level. Over the past two months, the FTSE100 index has fallen, adjusting to the support level of 7090.0. Nevertheless, recovering from a sharp fall after the statement of Theresa May about early parliamentary elections, the FTSE100 index is again rising in the uplink on the weekly chart.

Indicators OsMA and Stochastics on the 4-hour, daily and weekly charts recommend long positions.

While the FTSE100 index is above the short-term support level of 7295.0 (EMA200 on the 4-hour chart), positive dynamics remain.

In the event of a breakdown of this level, there may be risks of reducing the FTSE100 index to support levels of 7090.0 (February lows, October highs), 7050.0 (EMA200 and the lower border of the descending channel on the daily chart).

Breakdown of the level of 7050.0 and further decline will mean a reversal and the end of the upward trend of the FTSE100 index.

Nevertheless, the fundamental background creates the prerequisites for further growth of the index.

While the FTSE100 index is above 7295.0, long positions are more preferable.

The Bank of England maintains an extra soft monetary policy, which is a strong positive factor for the British stock market.

Support levels: 7386.0, 7295.0, 7200.0, 7090.0, 7050.0

Resistance levels: 7450.0, 7500.0



Trading Scenarios

Sell Stop 7365.0. Stop-Loss 7460.0. Take-Profit 7350.0, 7295.0, 7200.0, 7100.0, 7050.0

Buy Stop 7460.0. Stop-Loss 7365.0. Take-Profit 7500.0, 7520.0, 7550.0

*) Actual and detailed analytics can be found on the Tifia website at tifia.com/analytics

 

[TifiaFX]

S&P500: US indices rise against the backdrop of rising commodity prices

16/05/2017

Current dynamics

The recovery of prices for oil and other commodities supports US stock indices. The increase in prices for iron ore and base metals supported the shares of companies in the mining sector. In the oil market, positive dynamics has also been prevailing over the last week. After last Wednesday the Ministry of Energy of the United States presented data that showed a significant drop in oil and petroleum products in the United States, oil prices have appreciated by 8.5% by today. At the same time, investors do not lose hope for an extension of the agreement on the reduction of oil production in the framework of OPEC. So, recently the Saudi oil Minister Khaled Al-Falikh and the Russian energy Minister Alexander Novak expressed support for the extension of the agreement on the reduction of production for another 9 months. The next OPEC meeting will be held on May 25.

As a result, against the background of positive expectations on the oil market, WTI futures for NYMEX closed on Monday with an increase of $ 1.01 (or 2.1%) at $ 48.85 per barrel. The sub-index of the oil and gas sector in the S&P500 grew by 0.6%, which gave a positive momentum to the entire S&P500 index. As a result of yesterday's trading day, the S&P500 grew by 0.5%, Nasdaq Composite - by 0.5%, Dow Jones Industrial Average - by 0.4%.

From the US continue to receive positive macroeconomic data. Despite some deviation from the forecasted values in the smaller direction, in general, the indicators of inflation and the labor market of the USA point to the growth of the economy in the country. As long as the economy is growing, investors will prefer stocks and other asset-safe havens and other risky instruments.

Nevertheless, investors still believe that the Fed will raise interest rates in June. According to CME Group, the probability of a rate hike next month is estimated at 74% (last week the probability was at 83%). The likelihood of an early increase in the interest rate is holding back from more active purchases on the US stock market, which, nevertheless, is dominated by a positive trend.

From the news for today we are waiting for the data from the USA. At 12:30 (GMT), a report on the dynamics of new permits for the construction of houses in the US for April, which is an important indicator of the housing market, will be presented. The higher the value, the more positive the effect is on the stock indices. Forecast: 1.27 million new permits (against 1.26 million permits last month). If the data prove to be better than the forecast, then the US indices will grow. At 13:15 (GMT) the report of the Board of Governors of the US Federal Reserve on the volume of industrial production and use of production capacities for April is published. A high result may indicate the existence of inflationary expectations and, consequently, a rapid rate increase, so a high figure strengthens the US dollar.

But at the same time, strong macro data contribute to the growth of investor confidence in the stability and growth of the US economy. And this is a positive fundamental factor for the US stock market. In general, the positive background for stock indices remains.


Support and resistance levels

Since the opening of today's trading day, the S & P500 index has slightly decreased. Nevertheless, the positive dynamics of the S & P500 index remains. Since February 2016, the S & P500 index has been steadily growing and is in the ascending channels on the daily and weekly charts.

At the moment, the S & P500 again tests the resistance level of 2400.0, reached in early March, for breakdown.

Indicators OsMA and Stochastics on the daily, weekly, monthly charts went to the side of buyers. In case of resumption of growth, the nearest target will be level 2412.0 (the upper limit of the ascending channel on the daily chart).

The reverse scenario will be related to the breakdown of the short-term support level 2392.0 (EMA200 on the 1-hour chart) and the decrease with the nearest targets near the levels 2360.0 (the bottom line of the uplink on the daily chart), 2326.0 (April lows). The breakdown of support levels of 2275.0 (EMA200 on the daily chart), 2265.0 (Fibonacci level of 23.6% correction to growth since February 2016) will cancel the bullish trend of the index.

Support levels: 2392.0, 2375.0, 2360.0, 2326.0, 2275.0, 2265.0

Resistance levels: 2400.0, 2412.0



Trading Scenarios

Sell Stop 2390.0. Stop-Loss 2405.0. Objectives 2375.0, 2360.0, 2326.0, 2275.0, 2265.0

Buy Stop 2405.0. Stop-Loss 2390.0. Objectives 2412.0, 2420.0

*) Actual and detailed analytics can be found on the Tifia website at tifia.com/analytics

 

[TifiaFX]

Brent: Middle of the range and key level 51.70

17/05/2017



Current dynamics

Interrupted by a series of non-stop 4-day growth, the price for Brent crude oil finished yesterday's trading day with a decrease of 1% or $ 0.6 per barrel. Published at the end of yesterday's trading day, data from the American Petroleum Institute (API) was the final chord of yesterday's decline in the price of oil. According to the API, oil reserves in the US increased by 882,000 barrels in the week of May 6-12. The presented data again revived fears of investors that the growth of oil production in the US is negating the efforts of the Organization of the Petroleum Exporting Countries (OPEC) to restore the balance in the market.

Oil prices in different directions are pulling information on the growth of oil reserves and production outside the cartel and the expectation that OPEC and countries outside the cartel are supporting the extension of the deal to cut production. On Monday, it was reported that Saudi Arabia and Russia expressed a propensity to extend the agreement to reduce production for another 9 months. The OPEC meeting on this issue will be held next week (May 25).

The skepticism about the efficiency of the OPEC deal returned to the oil market after the International Energy Agency (IEA) published data on Tuesday that according to which in the 1st quarter commercial oil reserves in developed countries increased by 24.1 million barrels. IEA data also indicate the growth of stocks in oil storage facilities and in April.

According to analysts of the oil market, OPEC will be able to achieve the goal, and world oil reserves in the storage facilities will drop to an average of 5-year level provided that in the next year the supply of oil is reduced by 1 million barrels per day. Some of the economists are of the opinion that the OPEC reduction deal should be extended for 2018 as well.

The increase in the number of drilling rigs and the increase in production in the United States go faster and larger than expected, offsetting the efforts of OPEC. This could lead to the fact that production in the US will continue to grow, and support from OPEC in 2018 will end. In this case, the risks of a sharp drop in oil prices rise significantly against the backdrop of a growing surplus of oil supply.

Today at 14:30 (GMT) will be a report from the US Department of Energy on the change in oil and petroleum products in the US over the past week. It is expected that oil and petroleum products in the US fell by another 2.283 million barrels (after a recent weekly reduction of 5.247 million barrels). When confirming the forecast, the price of oil should rise.

Closer to the end of the US trading session (18:00 GMT) on Friday a report will be published from the American oil service company Baker Hughes on the number of active drilling rigs in the US. It is expected that the number of active oil drilling rigs in the United States has again increased (in the previous week their number was 712 units). The next growth will negatively affect oil prices.


Support and resistance levels

After a sharp decline at the beginning of the month to 47.00, the price of Brent crude oil was able to significantly adjust to today's expectations on the expectation that OPEC will be able to agree on an extension of the agreement to reduce oil production.

Today, Brent crude trades near the key resistance level at 51.70 (EMA200 on the daily chart). This level is also a kind of middle line of the range formed between the levels 52.35 (EMA144, EMA50 on the daily chart) and 50.70 (the Fibonacci retracement level of 61.8% correction to the decline from the level of 65.30 from June 2015 to the absolute minimums of 2016 near the 27.00 mark).

The price for Brent crude oil remains within the descending channel on the daily chart, the lower limit of which is near the support level of 46.20 (50% Fibonacci level).

If the support level breaks through 50.70, the price will go down to levels 48.35, 47.10, 46.20. In the case of consolidation below 46.20 (50% Fibonacci level), the upward trend in the price of Brent crude oil will be canceled.

An alternative scenario for growth is associated with a return of the price above the level of 52.35. Long-term goals in the case of this scenario are near 55.60 (EMA200 on the weekly chart), 56.70 (April highs), 57.50, 58.40 (highs of the year).

Support levels: 50.70, 48.35, 47.00, 46.20

Resistance levels: 51.70, 52.35



Trading Scenarios

Sell Stop 51.25. Stop-Loss 51.85. Take-Profit 50.70, 50.00, 48.35, 48.00, 47.10, 46.20

Buy Stop 51.85. Stop-Loss 51.25. Take-Profit 52.35, 54.00, 55.00, 55.60, 56.70, 57.00, 57.50

*) Actual and detailed analytics can be found on the Tifia website at tifia.com/analytics