Trading ideas for EUR/USD, AUD/USD and Brent

April 06, 2022

EUR/USD: The European currency is weakening against the U.S. dollar. Investors’ attention was fixed on March data on business activity in the services sector, which turned out to be positive against the forecasts: the Eurozone PMI services business activity index rose from 55.5 to 55.6 points instead the expected decrease to 54.8 points, while the same indicator for Germany increased from 55.8 to 56.1 points instead of the anticipated 55.0. Experts note that the positive figures were a consequence of the easing coronavirus pandemic and increased demand for services among citizens. Despite strong statistics, the euro remained under pressure as the market expected the publication of a new package of anti-Russian sanctions, which could have a negative impact on the European economy. In particular, a ban may be imposed on exports of Russian coal, which accounts for 19.3% of the consumption in the bloc, but the volume of its sales to European countries has already gone down in the last month.

SELL 1.0880/TP 1.0800/SL 1.0910

 

AUD/USD: The Australian currency is strengthening against its main competitors – the euro, the pound, the yen and the U.S. dollar. Investors are focused on the results of the Reserve Bank of Australia’s regular meeting. The regulator left the rate at the previous level of 0.10%, but the rhetoric of officials became more “hawkish”, which strengthened the national currency. In particular, officials said they will assess inflation and salary data in the coming months to determine whether to start raising interest rates. Earlier the market had suggested that a tightening of monetary policy would begin in the fall, but now many investors are tending to believe that the adjustment of indicators will begin as early as June. Meanwhile, March data on business activity in the services sector in Australia turned out to be weaker than expected: the value declined from 57.4 to 55.6 points against the forecasted 57.9.

BUY 0.7585/TP 0.7637/SL 0.7560

 

Brent: Oil is trading sideways. Prices are driven by a number of opposite factors. First of all, the instrument’s positions are strengthening amid expectations of new economic sanctions against Russia, which may further limit the entry of Russian raw materials into the market. It is assumed that the EU may impose a ban on the purchase of coal, while German Foreign Minister Annalena Berbock announced plans to refuse Russian oil and even gas. On the other hand, the growth of quotations is restrained by the possibility of the conclusion of a nuclear deal with Iran, which was once again confirmed by the State Department spokesman Ned Price. Investors are constrained by the coronavirus pandemic in China. Yesterday, Chinese authorities extended the quarantine in Shanghai, which affects 26 million people.

BUY 108.10/TP 112.00/SL 107.10