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Trading ideas for EUR/USD, GBP/USD and BRENT

June 27, 2022

EUR/USD: Euro shows weak dynamics against USD. The June IFO German Business Climate Index turned out to be discouraging: the index fell from 93.0 to 92.3 points, worse than the forecasted 92.9 points. Instead of the expected 87.4 point increase, the business expectations index fell to 85.8 points. German business currently sees no prospect for improvement. Moreover, it may soon face a serious reduction in the supply of Russian gas via the Nord Stream route. The German Minister of Economy and Climate Robert Habeck has already stated that with the import of “blue fuel” in the current low volumes several national industries will have to be stopped, which will have a negative impact on the overall rate of production in the Eurozone and, therefore, on the euro dynamics against the greenback.

SELL LIMIT 1.05800/TP 1.05365/SL 1.05890

 

GBP/USD: May retail sales data from Great Britain turned out to be discouraging: the indicator fell by 0.4% m/m, which is slightly better than the forecasted 0.7% decline, and lost 4.7% y/y, which is worse than the preliminary market estimate of -4.5%. Negative dynamics can be observed due to rising inflation and declining purchasing power of households, which forces citizens to save and refuse to buy. In addition, political instability is worsening in the UK: Prime Minister Boris Johnson’s Conservative Party lost two by-elections as voters are unhappy with declining living standards and the negative fundamental background that affects the reputation of the official. This has led to renewed calls for his resignation, including calls from certain members of the Conservative Party. Johnson does not intend to step down as prime minister just yet and promises to do more to overcome the current economic crisis.

SELL LIMIT 1.2305/TP 1.2230/SL 1.2320

 

BRENT: Oil prices are supported by a new reduction of oil production in Libya, which, according to experts, may turn out to be lower than stated by local government representatives, and OPEC refusal to significantly increase production volumes, despite serious growth in demand for “black gold”. The meeting of cartel members is scheduled on the 30th of June and it is likely to approve previous plans to increase crude production in July and August in the amount of 648 thousand barrels per day. However, many experts believe that it will not be enough to meet global demand and significantly reduce energy prices.

BUY LIMIT 107.85/TP 112.95/SL 106.15