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

May 18, 2022

EUR/USD: The European currency is strengthening against the US dollar today. Yesterday preliminary eurozone GDP data for the first quarter was released, exceeding market expectations. The European economy grew by 0.3% in quarterly terms instead of 0.2% and by 5.1% in annual terms instead of the expected 5.0%. Overall, the European economy showed resilience even despite the negative impact of rising inflation and the Russia-Ukraine crisis, in particular supply chain disruptions and declining business confidence. Also note today’s comments from European Central Bank official Klaas Nota, who said that the regulator may raise interest rates by 50 basis points at once at its July meeting. In general, the number of supporters of monetary policy tightening within the European regulator continues to grow.

BUY 1.0565/TP 1.0675/SL 1.0540

 

USD/JPY: The Japanese currency is weakening against the U.S. dollar. In the absence of significant economic releases, the yen is trading under pressure from external factors. Yesterday Japan’s Finance Minister Shunichi Suzuki once again mentioned the danger of further yen weakening, noting that the recent fluctuations were too rapid and undesirable. The official also added that the government has a reserve of 1.35 trillion US dollars, which can be used for currency interventions if needed. In addition, Japanese authorities are preparing for a full opening of the country’s external borders. Today the launch of a “test tourism” program was announced. It will allow small groups of travelers to visit Japan. If the pandemic does not spread, the borders will be opened and the economy will get an additional boost.

BUY 129.61/TP 130.75/SL 129.25

 

Brent: Oil quotes are making moderate growth attempts today. The main factor behind the growth is the EU’s potential ban on Russian oil supplies. So far, the embargo has not been fully agreed upon due to Hungary’s position, but experts are confident that the details of the new oil sanctions will be announced at the EU summit to be held on May 30-31. The price growth is also driven by the aggravation of geopolitical tensions between the EU and Russia as Finland and Sweden are set to apply to join NATO.

BUY 113.90/TP 119.10/SL 112.05