fb&WTI/JPY Forecast | Development of the coronavirus infection in China has significantly slowed down | IFCM UK

Technical Analysis &WTI/JPY : 2020-02-12

Recommendation for WTI JPY:

Buy
Strong SellSellNeutralBuyStrong Buy

Above 57,5

Buy Stop

Below 53,5

Stop Loss

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IndicatorValueSignal
RSI Buy
MACD Buy
MA(200) Neutral
Parabolic SAR Buy
Bollinger Bands Neutral

Chart Analysis

IFC Markets Tech Analysis

On the daily timeframe, the WTI/JPY: D1 is in a wide neutral trend. Now it has once again bounced off its lower boundary and is correcting up. A number of technical analysis indicators formed buy signals. The bullish momentum may develop in case WTI/JPY rises above its last fractal high at 57.5. This level may serve as an entry point. The initial stop loss may be placed below the last fractal low, the lower boundary of the neutral range and the Parabolic signal at 53.5. After opening the pending order, we shall move the stop to the next fractal low following the Bollinger and Parabolic signals. Thus, we are changing the potential profit/loss to the breakeven point. More risk-averse traders may switch to the 4-hour chart after the trade and place there a stop-loss moving it in the direction of the trade. If the price meets the stop level (53.5) without reaching the order (57.5), we recommend closing the position: the market sustains internal changes that were not taken into account.

Fundamental Analysis

In this review, we suggest considering the personal composite instrument (PCI) &WTI/JPY. It reflects the price dynamics of the portfolio of futures on WTI oil against the Japanese yen. Will the WTI/JPY rise?

Such a movement means the weakening of the yen and strengthening of the oil. The dynamics of this PCI may depend on the situation with the coronavirus infection in China. Currently, an increase in the number of infected and dead people has significantly slowed down. So far, the peak of the infection was on February 5, when a little less than 4 thousand new cases of coronavirus have been recorded. On February 10, it decreased to 3 thousand. Chinese authorities believe that the daily number of infected people stabilizes and by the beginning of March, it will start declining. The Japanese yen was considered as a safe haven asset by investors. A decrease in global risks may reduce demand for it. For the same reason, world oil demand may increase. The OPEC + Technical Committee recommended to extend the current reduction in oil production by the cartel countries and independent producers in the amount of 1.7 million barrels per day and increase it by 600 thousand to 2.3 million barrels per day. However, a final decision has not been made yet.

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