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Forex forecast for the week 16 - 20 May 2016: BRENT - a trap for the "bulls"!



Forecast May 16 -20

Rate of gold XAU / USD forecast for the week 

Players of gold to sell for two reasons: 

First, low inflation expectations in the G-7 countries, a negative factor for the metal. On Thursday, the Bank of England signaled to market participants on the reduction of consumer activity in Britain, in Germany, inflation again went into negative territory in annual terms, in Japan there is no increase in inflationary pressures.



Against this backdrop, players no longer need to buy gold to hedge inflation risks, which may arise in the global economy. 

Second, greenbacks growth carries additional risks for gold, which has a close inverse correlation with the dollar. Historically, that the XAU / USD investors call the "anti-dollar". Accordingly, the growth of quotations of the American currency negatively affects the value of the metal. But gold can in the first half of the week to show some strengthening against decrease "risk appetite", which traditionally has a positive effect on the cost of the "safe" assets. 

Gold. Trading recommendations for the week : players but a new week is to sell gold Sell on growth course in 1282/1297 and the goal for 1260.


Gold. Trading recommendations for a week


Brent oil forecast for the week

In the new trading week, players should open short positions, in spite of the positive portion of the US Department of Energy and OPEC last week. Recall that the min. US energy has reported a reduction in crude oil reserves for the first time in the past four weeks, the oil cartel on Friday 13 May pointed to expectations of lower production outside OPEC especially in America, amid bankruptcy shale mining companies. Against this positive background, oil prices set a new six-month high and such high levels should be used to open a Sell sales. The decline in oil prices due to the appreciation of the US dollar on the Forex market. Dollar index USDX basket since the beginning of the month grew by 1.66%, while Brent oil during this period gained 0.97%. This usually ends rasskorelyatsiya decline in oil prices, as the price of oil is denominated in US greenbacks. But Friday's report of Baker Hughes oilfield services company pointed to a reduction in the US rig to 10 units, this allows the bulls to test a maximum of the last week. Most likely, it will be a trap for traders and then we will see a decrease in quotations. 

Oil Trading recommendations for the week : oil traders in the new week is to sell Sell on rise in prices to the levels of 48.35 / 49.90 and goals at the level of 45.70.

Oil Trading recommendations for a week


S & P500 Index forecast for the week 

Traders on the S & P500 in the new week is to look at the sales of the US stock market for two reasons. 

First, the main event of the week will be inflation report for April on Tuesday, May 17th. In the first month of the second quarter, the yield on 10-year-olds increased by 5 bp, which together with an increase in revenues and an increase in retail sales can expect to yield a moderately positive data. The price of petrol rose by 3.63% in April, this is positive for inflation. Good data on inflation negative factor for the stock market, as the monetary authorities will be to think about tightening monetary policy. 

The second, on the last trading week in the "green zone" closed only two defensive sectors (utilities and non-cyclic products), which is traditionally the signal for correction. When investors are worried or scared, they go into these sectors. 

The S & P500. Trading recommendations for the week : Investors in the new week is to sell the index S & P500 Sell on growth in 2057/2077 and purpose at the level of 2021.



Aleksandr Goryachev 
analyst « 
FreshForex »


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