Events to watch out for today:
13.00 Moscow time. Eurozone: Volume Change
For the euro, a mixed background is forming today. On the one hand, investors can re-activate sales of the European currency, as rising inflation in the United States forces investors to buy. At the end of 2019, many investment funds expected a decrease in interest rates by the US Federal Reserve in 2020. Now, looking at the data on, all traders have come to the conclusion that the Fed will not lower rates anymore. And if so, then it makes no sense to expect a depreciation of the dollar. On the other hand, synchronous growth is observed in the commodity market, which may support the euro. We see good demand in metals and energy.
Trading recommendation: flat 1.0803 -1.0875
We open Buy positions for two reasons. Firstly, in the debt market there is an increase in the yield of 10-year UK government bonds in relation to its counterparts from the United States and Germany. In such periods, the pound traditionally receives good support. Secondly, an uptrend in the oil market will provide additional support to buyers of the British currency, since the pound correlates with black gold. Investors expect the extension of the OPEC + pact to limit oil production for three months, until July 1, 2020.
Trading recommendation: Buy1.3035 / 1.3020 and take profit 1.3066.
The upward trend on the global stock exchanges continues, which will contribute to the growth of quotations, since the currency pair correlates with stock markets. Investors are waiting for lower interest rates of the Central Bank of China, which will be held on Thursday February 20. Until this time, I expect the stock markets to grow, and then either a correction expects us, or the growth will continue. Everything will depend on the actions of the central bank of China. If the regulator only lowers interest rates, we will see profit taking on long positions and a correction. If the central bank takes a number of measures (reducing reserve standards, launching a quantitative easing program), then we will see a continuation of the rally in the stock markets.
Trading recommendation: Buy109.73 / 109.55 and take profit 110.11.
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