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

April 04, 2022

EUR/USD: The European currency is weakening against the U.S. dollar. On Friday, a number of important economic statistics were released in Europe. The Eurozone index of business activity in the manufacturing sector fell more than expected, from 58.2 to 56.5 points, but still remained at a high level, despite the ongoing Ukrainian crisis. Germany’s industrial business activity index declined from 57.6 to 56.9 points. The consumer price index for March rose from 0.9% to 2.5% month-over-month and from 5.9% to 7.5% year-over-year. Energy prices rose the most, but the cost of food and durable goods increased significantly, suggesting that price increases are shifting from the energy sector to other sectors of the economy. Bundesbank President Joachim Nagel said on this occasion that the European Central Bank (ECB) should take countermeasures to curb price increases.

SELL 1.1038/TP 1.1000/SL 1.1053

 

USD/JPY: The Japanese currency is weakening against the U.S. dollar. Business sentiment indices of major Japanese companies Tankan for the first quarter of this year were published on Friday and turned out to be better than market expectations. The index of manufacturers reduced from 17 to 14 points instead of the expected 12 points, and the index of non-manufacturers reduced from 10 to 9 points instead of the expected 5. Business sentiment in Japan deteriorated, though not as much as experts predicted. Companies expect a further decline in economic performance and profit due to rising energy prices and the conflict in Ukraine. Entrepreneurs also fear a drop in domestic demand as Japanese households, which have not yet recovered from the negative effects of the coronavirus pandemic, receive a new blow from rising prices.

BUY 122.70/TP 123.12/SL 122.55

 

Brent: Oil prices show a slow decline. Brent developed the downward impulse, which was formed the day before when the market reacted by sales to new statements of U.S. President Joe Biden about the intention to release an additional 1 million barrels per day from the strategic reserve (SPR). This measure is expected to be effective for the next six months and will stabilize prices at current levels or lower amid uncertainties about energy supplies from Russia. In addition, Biden instructed to develop new measures to support the U.S. producers of “black gold,” which would also potentially contribute to the development of correction on the commodity platforms.
Meanwhile, OPEC+ has failed to bring any changes to the market again. Despite pressure from the U.S., the cartel refused to increase output volumes: in May, production will be increased only by the planned 432 thousand barrels per day.

SELL 103.05/TP 98.20/SL 104.60