Daily Report by Capital Street FX

The U.S dollar held on to its strength against most of its peers on Monday, as the monetary divergence between the U.S and other parts of the world has been reinforced by comments from central bank officials, after the annual economic policy symposium in Jackson Hole, Wyoming.

However, it was not Yellen’s words that supported the greenback, but the comments from Fed Vice Chairman Stanley Fisher that actually fueled the U.S dollar rally. The Fed’s top deputy, in an interview with CNBC, which was conducted after Yellen’s speech, said that Yellen’s remarks was consistent with the possibility of as many as two rate hikes by the end of 2016, and did not forget to stress on the importance of upcoming data in contribution to any Fed’s decision.

While Federal Reserve leaders spurred the speculation of at least one interest rate increase this year which could be as soon as September, Bank of Japan Governor Haruhiko Kuroda and European Central Bank Executive Board member Benoit Coeure expressed their eagerness to deploy further necessary measures to boost the potential growth of their economies.

Kuroda stated that “there is ample space for additional easing in each of the three dimensions”, referring to the BOJ’s three options of topping up asset purchases, buying more bonds and deepening interest rate. The BOJ Governor showed his readiness in boosting monetary stimulus if needed, reiterating that “The bank will carefully consider how to make the best use of the policy scheme in order to achieve the price stability target”.

Benoit Coeure, the ECB board member responsible for market operations, said that “We may see short-term rates being pushed to the effective lower bound more frequently in the event of macroeconomic shocks”, warning about the possibility of more frequently unconventional monetary policy deployed if governments don’t act to wrestle with unpleasant factors which are hampering the region’s recovery such high unemployment and banking systems loaded with bad loans.



Technicals

EURUSD
EURUSD opened the new week with a 15-pip gap down which sent the currency pair to below 38.2% Fibonacci retracement level at 1.11894. But the euro once again pulled back as a corrective move because the market has entered the oversold territory. The sharp plunge last Friday caused the pair to move past two MAs and a strong support at 1.12440. With the short-term MA crossing over the long-term MA from above, EURUSD is under a downward pressure which may refrain the current up moves.

Trade suggestion

Sell Limit at 1.12200, Take profit at 1.11780, Stop loss at 1.12500



USDCHF
USDCHF has broken above the downward sloping trading range which has been formed for one month. After surging more than 150 pips from the support at 0.96300 on Friday, the pair has entered a consolidating period as a result of an overblown market. As RSI (14) has still been moving in the overbought zone, the ongoing retreat in the price is expected to last until the pair hit the key support at 0.97500.

Trade suggestion

Buy Limit at 0.97500, Take profit at 0.97915, Stop loss at 0.97280



CADJPY
CADJPY is on its track to reach the psychological resistance at 78.760 after a period of moving sideways within a shrinking range. With the downward trendline having been broken and the convergence of two moving averages, the pair seems to be on a firm rally. Nonetheless, the market has stepped in the overbought zone, signaling a pullback may come in. The level at 78.760 should be watched as a threshold for the pair to retreat.

Trade suggestion

Sell Limit at 78.760, Take profit at 78.185, Stop loss at 78.900



SUGAR
Sugar prices continuously rebound after each time hitting the 20-period moving average. Even when the price peeked out of the short-term MA, it barely fell too far from the long-term MA. The RSI (14) has been remaining above 50 and is heading upwards, consolidating the up-wave.

Trade suggestion

Buy Stop at 20.60, Take profit at 20.92, Stop loss at 20.30



BRENT
Brent is trading indecisively around the average prices of the last 20 periods and 50 periods, showing that both sellers and buyers are cautious. However, RSI (14) index has dimmed to below the dividing line between bullish and bearish territory. The commodity is expected to trade lower today as the market seems to lean on the bear.

Trade suggestion

Sell Stop at 49.25, Take profit at 48.80, Stop loss at 49.45



FTSE
FTSE bounced back from the support at 6778.00 as the sellers took profit when the price fell below this level and prepared to penetrate the oversold market. The 6778.00 bar has been a solid stance which prevents the index from falling deeper after the price had successfully broken through this level on August 08. As the %D line and %K line are heading downwards, FTSE is expected to break below this handle today.

Trade suggestion

Sell Stop at 6778.00, Take profit at 6735.70, Stop loss at 6813.80.

Contacts:
email: [email protected]
skype: capitalstreetfx.support

Daily Market Research by Capital Street FX

- Daily Report on August 30, 2016

Asian stocks gained on Tuesday following the advance in U.S stocks overnight, with all three U.S equity benchmarks closing higher overnight. On Wall Street, the Dow Jones ended yesterday’s session up 0.58 percent to 18,502.00, the S&P 500 rose 0.52 percent to finish at 2,180.28 while the Nasdaq added 0.26 percent to 5,232.33, as bullish sentiment was fueled by evidence that the world’s largest economy is growing.

Reports from the Commerce Department released on Monday reported that U.S consumer spending rose for a fourth straight month in July at the pace of 0.3%, based on strong demand for long-lasting manufactured goods such as automobiles, and rising household income. Meanwhile, the core personal consumption expenditure (PCE) price index, which excludes the volatile food and energy components, inched up 0.1% in July, maintaining the same pace as in June.

As a result, the core PCE – the Fed's favorite barometer for inflation - increased 1.6 percent on a year-over-year basis, remaining below the fed's target of 2 percent. To fully assess the outlook for the U.S monetary policy, investors are now shifting their attention to the monthly jobs data on Friday, which is forecast to report that 180,000 more jobs were added in July.

Crude prices continued to trade in a thin range as a stronger U.S dollar and focus on surging output from the Middle East weighed down the speculation over an output cap deal next month, even after data from energy monitoring service Genscape reported a drawdown of 287,444 barrels at the Cushing, Oklahoma delivery point for U.S. crude futures during last week.



Technicals

NZDUSD
NZDUSD is trading in an upward trending price range with higher highs and higher lows. The pair has just pulled back from the lower boundary of the trading channel, at the one-week low of 0.72080. However the market keeps attempting a test of this support. The %K line reversed into a downward movement after surging close to the overbought zone and is likely to cross over the %D line from above. With the two MAs converging above the price action, the pair is expected to retreat further, but the support at 0.72080 should be broken through ideally before a short position is attempted.

Trade suggestion

Sell Stop at 0.72270, Take profit at 0.71880, Stop loss at 0.72640



GBPUSD
GBPUSD fell back into the downward sloping range after failing to reach the 1.33000 psychological level. The MA20 has penetrated the MA50 from above, consolidating the down move following a brief correction. With the divergence between the +DI line and –DI line and the low reading on the RSI, GBPUSD is much likely to dip further.

Trade suggestion

Sell Stop at 1.30587, Take profit at 1.30000, Stop loss at 1.31200.



EURAUD
After a period of moving sideways around the 23.6% retracement at 0.47741, the pair has fallen below both this level as well as the 50-period moving average, which suggests further down moves. As can be seen from the RSI chart, the index has slid to 42.84. The bear is dominating the market and the currency pair is forecast to head downwards to the 38.2% Fibonacci level.

Trade suggestion

Sell Stop at 1.47440, Take profit at 1.47035, Stop loss at 1.47750.



COPPER
Copper is trading indecisively in a narrow range after a sharp selloff last week. The commodity is retreating from the MA20 and the resistance at 2.0904, and is anticipated to gather more bearish momentum as the –DI and +DI are converging, not to mention the RSI index is witnessing higher highs and higher lows but continues to stay below 50 and is pointing lower.

Trade suggestion

Sell Stop at 2.0745, Take profit at 2.0615, Stop loss at 2.0905



WTI
U.S crude prices are experiencing a period of consolidation. Both sides are taking cautious steps which can be seen in the short bodies of recent candles. Buyers are failing to get the price action through the MA20, while sellers are not able to break through the support at the 61.8% retracement level at 46.87. The commodity is likely to drift slightly lower until updated fundamental factors provide direction later in U.S session.

Trade suggestion

Sell Stop at 46.88, Take profit at 46.40, Stop loss at 47.21



EURO50
The Euro Stoxx 50 index retains its bullish momentum and is flying higher within the upward trending range. The index has crossed over the moving average price levels, but has still been locked within the range marked by the support at 2977.50 and the resistance at 3015.00. The RSI index has soared above the 50 line, and is supporting a breakout above the 3015.00 level.

Trade suggestion

Buy Stop at 3015.00, Take profit at 3030.20, Stop loss at 3001.50

Sell Stop at 6778.00, Take profit at 6735.70, Stop loss at 6813.80.

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FTSE100 signal by Capital Street FX



Boosted By Banking Stocks, FTSE100 Index Pushes Higher After Holiday

FTSE100 index reopened after closing for holiday on Monday, and left a wide gap up following two weeks of declines.

Stocks from banking sector led gainers, with HSBC Holdings climbing 2.1%, Lloyd Banking Group PLCs adding 1.34%. Shares of Bunzl rallied 1.45% after the business supplies distributor reported an increase in revenue and operating margin in its first half of 2016. Meanwhile, building material firm CRH, which reported better-than-expected half-year results last week, extended gains by surging more 2.01%.

Mining companies are among worst performers with Rio Tinto dropping by 3.61%, Randgold Resources Ltd. dipping 3.78% and Glencore Plc falling more than 3 percent as commodities declined on the face of a strengthening dollar.

Trade suggestion

Buy Stop at 6844.00, take profit at 6856.35, stop loss at 6835.70

Contacts:
email: [email protected]
skype: capitalstreetfx.support

Daily Technical Analysis by Capital Street FX



Daily Report on September 06, 2016



Crude prices held onto most of their gains from yesterday in the Asian trading session on Tuesday, as top producers Russia and Saudi Arabia, despite failing to announce concrete steps to limit output, agreed to cooperate on stabilizing the oil market. Russian Energy Minister Alexander Novak and his Saudi counterpart have moved toward a strategic energy partnership after a meeting at the G-20 summit in China.

Saudi energy minister Khalid al-Falih stated that he was optimistic about cooperation with other producers ahead of a meeting this month in Algiers, adding that freezing production was not the only solution to a supply glut. The oil price advance led energy stocks higher, which in turn supported Asian shares edge up on Tuesday.

A report by the British Retail Consortium (BRC) and KPMG published overnight showed that UK retail sales decreased 0.9pc in August compared to the same month last year on a like-for-like basis. The weakest performance since September 2014 was attributed to the warm weather that retrained clothing sales, and the Olympics that distracted shoppers by keeping them indoors.

Having already pulled the trigger on policy easing in May and August, the Reserve Bank of Australia (RBA) held its interest rate unchanged as expected at Tuesday's meeting. The central bank stated that it will let the stimulus measures already introduced, to percolate through the economy before deciding if yet more stimulus is needed.



Technicals

EURAUD



Fig: EURAUD H4 Technical Chart

EURAUD has fallen off the 23.6% retracement level at 1.46967 and continues to head downwards with the pressure from the two MAs placed above the price action. The MA20 has crossed over the MA50 from above, not to mention that the ADX index has soared higher. The pair is anticipated to dip lower to test the support at 1.45450.

Trade suggestion

Sell Stop at 1.46015, take profit at 1.45450, stop loss at 1.46615



USDCAD



Fig: USDCAD H4 Technical Chart

USDCAD has been on a decline since it reversed from a nearly one-month high at 1.31471 reached on Friday. The short-term MA has penetrated the long-term MA from above, signaling further slump in the market. Additionally, since the ADX has surged higher to 53.19, with a big divergence between the +DI and –DI line, the bears are expected to gain momentum and push the pair lower. However, the USDCAD is up against a strong support zone, which is an ascending trendline formed during the period from August 18 to date. To extend the down move, USDCAD needs to make a breakout through this support first.

Trade suggestion

Sell Stop at 1.29000, take profit at 1.28570, stop loss at 1.29500



USDCHF



Fig: USDCHF H4 Technical Chart

USDCHF has been moving sideways around the key 0.98000 level for the last three trading days. The pair initially breached the upper boundary of the ascending trading channel and broke out of it. But has now fallen back into the trading channel. The market has been locked under the MA20 for a while but has not been able to cross below the MA50. As the %K line is pointing down and the RSI has dipped below 50, the pair is forecast to fall further to the support at 0.97500.

Trade suggestion

Sell Stop at 0.97880, take profit at 0.97500, stop loss at 0.98200



GOLD



Fig: GOLD H4 Technical Chart

Gold has been on a rise since the beginning of September but the rally is being held back within the descending channel. While the bull is overwhelming in the market and the upcoming convergence of the two MAs placed below the price action looks likely, a breakout though the channel resistance is anticipated. However, in case the precious metal can breach this handle, the major resistance at 1330.00 will be another solid stance for gold to get through.

Trade suggestion

Buy Stop at 1328.50, take profit at 1333.20, stop loss at 1325.00



BRENT



Fig: Brent H1 Technical Chart

Brent witnessed a spike yesterday which took the commodity beyond the 23.6% retracement level to retest a nearly one-week high at 49.37. Brent pared most of its gains afterwards but failed to break below the MA20 and is currently trading above this support. The ongoing up-wave has created a bullish impulse in the market, with other indicators currently supporting the up move.

Trade suggestion

Buy Stop at 47.80, take profit at 48.45, stop loss at 47.40



DAX



Fig: DAX H4 Technical Chart

Germany's DAX30 index has been moving in an ascending triangle pattern. Higher lows have been continuously created but the index has been restrained from forming new highs due to the resistance at 10740.00. DAX seems to be trading with a sideways to downwards bias currently. However, any down move is expected to subside and the market may bounce back once it hits the MA20 and may go on to retest the 10740.00 resistance level.

Trade suggestion

Buy Limit at 10636.00, take profit at 10740.00, stop loss at 10600.00

Gold Signal by Capital Street FX


Go Longs on Gold as Fed May Need To Stand Pat on Rates This September

Gold retested over one-week high at 1342.11 after a couple of data released on Tuesday that were not only far beyond earlier expectations but also completely dislodged any thought of a U.S economy that is “healthy enough” to withstand a rate hike as soon as later this month.

Report from the Institute for Supply Management showed that America’s service industries expanded in August at the weakest pace in six years. The ISM non-manufacturing index nose-dived to the lowest since February 2010 to 51.4, from 55.5 in July, while economists forecast the figure to come out at 55.4.

In a separate report, the Federal Reserve’s labor-market conditions index also swung back into negative territory last month after a positive reading in July, marking the seventh negative reading in the past eight months. The Fed’s gauge, which combines 19 labor market indicators, fell to minus 0.7 in August from 1.3 in one month earlier.

Trade suggestion

Buy Stop at 1340.50, Stop loss at 1333.00, Take profit at 1345.90

Copper Market Outlook by Capital Street FX


Copper Picks Up On Signs of Rising Demand – Traders Advised To Be Cautious As Market May Not Easily Re-Balance

Copper opened Tuesday’s trading session with a small gap down but quickly covered the gap to extend bullish momentum to a second consecutive trading day despite swelling inventories, as demand is showing signs of pick-up while cross currents in supply reduced pressure cast by worries over a market surplus.

Inventories tracked by the London Metal Exchange rose by 10,025 tons to 328,525 tons, causing stocks of copper held at LME approved warehouses to rise by more than 60 percent since Aug. 11. However, stocks held by the Shanghai Futures Exchange fell to 152,404 tons as of September 2, down eight percent compared to the previous week.

The decline in SHFE may be the result of a marginal rise in demand in Europe and Asia after the summer vacation has ended. “Feedback from fabricators onshore points to a pick-up in orders from the construction sector in recent weeks”, said Standard Chartered.

Elsewhere, striking workers at Codelco’s small Salvador mine (producing 49,000 tons per year) and Anglo American’s Los Bronces mine (producing 437,800 tons per year) following failed wage negotiations in Chile – the world’s top copper producing nation – could cause production to fall further in the coming months.

Meanwhile, also on the supply side, Vedanta – India’s second largest copper producer with current output of 400,000 tons a year – is harboring the ambition to dethrone its rival Hindalco (500,000 tons) from first place in terms of output. Vedanta is reported to be restarting a cooper mine on Tasmania’s west coast in 2017, three years after the mine’s operations were suspended due to the death of two workers in 2014 and another in 2013. The mine is estimated to possess 200 million tons of reserves with an annual output of 100,000 tons

Previously, CEO of Vedanta’s Copper business R Ramnath stated that the conglomerate is planning to invest up to Rs. 3,000 crore ($450 million) in its Indian copper operations to double the capacity to 800,000 tons by 2019, making the firm India’s largest producer of the metal.

In a recent meeting with the government, India’s top copper producers — Hindalco, Vedanta and Hindustan Copper — have demanded that import duty on finished copper products be raised to 7.5% from 5% now as the country’s imports are growing at an alarming rate of over 20% for the last five years. These domestic producers are afraid that copper from Asean countries and Japan which is benefitting from export incentives could take over their market share that is about 80% at around 1 million tons a year in total.


Copper has been trading sideways in a thin range between 2.0900 and 2.0695 for nearly two weeks, after stabilizing post the sharp down move between mid/late July and August 24. The metal continues to remain in the downward sloping trading channel. Bears currently seem exhausted after having continuously pushed prices lower and held the market near oversold zone. Some bullish interest has come back into the market at the lows, but bulls are facing strong resistance at 2.0900. Bears are expected to get back into the market, after a period of short-covering inspired bounce-backs, and may push copper prices back down again.

Trade suggestion

Sell Stop at 2.0900, take profit at 2.0680, Stop loss at 2.1140

EUR/CHF signal by Capital Street FX

EUR/CHF

From GMT 10:15 06/09/2016
Till GMT 21:00 06/09/2016

Buy at 1.09315
Take profit at 1.09450
Stop loss at 1.09200