Events to watch out for today:
16.30 Moscow time. USA:
The highlight of the day will be the publication of inflation data in the United States for January. The market expects growth of the indicator by 0.2%, to the level of 2.5%. Speaking on the eve of the head of the US Federal Reserve Jerome Powell said that inflation in the coming months will show growth. And the market completely agrees with the opinion of the head of the Fed. How will this event affect the value of the dollar? The growth rate has already been taken into account by the market, and against this background, we can expect a moderate increase in dollar quotes after the publication of the data. Perhaps the growth will be observed within a few minutes, after which investors will begin to take profits on their positions. It is worth noting that the final inflation rate may not grow by 0.2%, but by 0.1%, which may disappoint the market. What to do in this case? Today I would refrain from active trading on the euro. As an alternative, we can consider the “longs” by European stock indices, first of all, by the German index, according to which a good uptrend is observed this week, and which is set to test the psychological level of 13800 points.
Trading recommendation: flat 1.0833 -1.0905
Today, a mixed background is forming. On the one hand, there is a decrease in the yield spread of 10-year UK / US government bonds in the credit market, which is negative for the pound. On the other hand, the positive dynamics of the oil market may encourage traders to open “longs” for the pound, as the British currency correlates with “black gold”. On the eve of Moscow, the Ministry of Energy of Russia met with the heads of Russian oil and gas corporations who spoke out about the need to extend the OPEC + deal on current conditions until July 1. Let me remind you that this deal is valid until April 1, and it’s its fate that depends on the position of Russia. Thus, the OPEC + countries will extend the agreement on limiting oil production, which will positively affect the quotes of "black gold".
Trading recommendation: flat 1.2920 -1.2985.
The uptrend in the US stock market is gaining momentum, and this process provides good support to USDJPY buyers, as this currency pair has historically correlated with the S & P500 index. Fed Chairman Jerome Powell spoke on the eve of the Senate Banking Committee of the US Congress, where he said that in the event of a recession, the Federal Reserve would actively use quantitative easing. This is another signal to the stock markets that the Fed is always ready to "shoulder up" in difficult times, turn on the printing press and buy back everything that is bad that it can. Investors are now reassuringly buying corporate stocks in North America, pushing the S & P500 to a new all-time high.
Trading recommendation: Buy109.75 / 109.60 and take profit 110.04.