Forecast for the week February 12th through February 16th:
This week we are observing negative signals. The first reason for exchange rates drop is risk assets sales all over the world. Investors sell shares and other high profit assets, which is negative for bitcoin as it itself considered a risk asset. The second reason is anticipation of cryptocurrencies’ exchanges regulation in Asia. Central Banks of South Korea and China are taking steps to control digital currencies, which will also have a negative impact on cryptocurrency capitalization. Trading signals: Sell 9200/10000 and take profit 7000.
During the week we are likely to see testing of psychological level of $60 per barrel for two reasons. Firstly, in USA oil production is about to set new forty-five-year historical high. Investors are waiting for new record in the nearest future, as number of rigs increased by 26 units over the last week. That’s an unpleasant surprise for the market. All the investors were waiting for a new historical high this year but only few thought it would happen so fast. Secondly, now we are observing strengthening of USDX, which is also a negative signal for energy commodities, as oil is quoted in US dollars and these two instruments have inverse correlation. Trading signals: Sell 63,41/64,50 and take profit 60,00.
Shares of one of the largest Russian food retailers Magnit are being heavily sold now. Downtrend is likely to continue due to recent press conference of the company’s CEO Sergey Galitsky, who announced that Magnit won’t pay dividends in 2018. As expected, investors viewed this news negatively. The company plans to use all the profit for investment project, that will cause revenue increase in the future. Trading signals: Sell 4850/5000 and take profit 4600.