March 16, 2023
EUR/USD: Wednesday’s trading session was the worst for the European currency for the past month. The pressure on the currency was exerted by the development of the U.S. banking crisis, which spread to Europe. While officials say the EU won’t be affected by the Silicon Valley Bank’s bankruptcy, shares of large European banks continued to fall. The decline was so severe that trading in shares of UniCredit, FinecoBank and Credit Suisse Group AG had to be stopped. Today, the focus of traders is the ECB meeting on monetary policy. According to forecasts, the European regulator may raise the rate by 50 basis points. If expectations are confirmed, the euro will be able to win back its losses. If not, the currency will be heading for new lows.
BUY STOP 1.0620/TP 1.0700/SL 1.0590
DXY: The U.S. dollar index is stable during the trading session on Thursday. Yesterday the U.S. economic data was released. The retail sales index fell by 0.4% last month after rising by 3.2% in January. The producer price index on a monthly basis fell from 5.7% to 4.6%, which indicates the easing of inflation pressure and gives the Federal Reserve an additional reason to slow down the rate hike pace. Most experts believe that the regulator will raise the rate by 25 basis points instead of the previously expected 50 basis points at its meeting next week. Dollar bears are also supported by concerns over the US banking sector, which pushes investors toward safe-haven bonds and gold.
SELL STOP 104.00/TP 103.20/SL 104.30
Brent: Yesterday, Brent crude fell 10% and tested the level of 71.65 per barrel. The U.S. banking crisis fears pressure oil prices. Market participants worry that the crisis has already spread to the eurozone and, possibly, China, which will affect global business activity and significantly reduce energy demand. Additional pressure on the asset comes from an increase in crude inventories: according to yesterday’s report by the Energy Information Administration, oil inventories in the US rose by 1.5 million last week, indicating low demand in the domestic market. With that said, Brent’s decline may continue.
SELL STOP 74.00/TP 72.00/SL 74.60