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.
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.
Buy Digital Put Option from 1.46015 to 1.45450 valid until 20:00 GMT September 06, 2016
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.
Buy Digital Put Option from 1.29000 to 1.28570 valid until 20:00 GMT September 06, 2016
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.
Buy Digital Put Option from 0.97880 to 0.97500 valid until 20:00 GMT September 06, 2016
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.
Buy Digital Call Option from 1328.50 to 1333.20 valid until 20:00 GMT September 06, 2016
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.
Buy Digital Call Option from 47.80 to 48.45 valid until 20:00 GMT September 06, 2016
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.
Buy Digital Call Option from 10715.00 to 10740.00 valid until 20:00 GMT September 06, 2016