In a speech in London overnight, the Bank of England (BOE) Governor Mark Carney stated that more stimulus to the UK economy may be deployed over this summer after the shock decision by voters to leave the European Union last Friday. The UK benchmark rate, which has been kept stable at 0.5% in the last seven years, is expected to be cut in BOE’s July or August meeting.
The British pound was on the defensive in the early Asian trading session today, after plunging more than 1% against the US dollar to 1.32044 late yesterday. The UK 10-year bond yield, meanwhile, dropped to a record low of 0.882%.
The KOF Economic Research Agency on Thursday released its monthly survey on Swiss economy. The Barometer for June came in at 102.4, compared with 101.8 in the preceding period. This indicator continued to stay above its historical average, indicating that the nation’s economy is still in a stable condition.
On a similar note, the Canadian economy is also reporting positive signals which can be seen in data reported recently. The real Gross Domestic Product (GDP) in April rose for the first time after declining in the two preceeding months. The latest report showed an increase of 0.1% in monthly growth, led by gains in manufacturing, utilities and the public sector.
The commodity markets on the first day of July marked some gains. Gold, still held its steam – rising to $1329.95/oz – 1.3% higher than its previous close. The global oil benchmark, Brent, also ticked up to $50.11/barrel, in comparison with the last settlement of $49.83/barrel on the day before.
The trading session ahead could be marked by thin trading that could cause some sharp moves as position squaring and low volumes increase volatility ahead of the 4th of July Independence Day Holiday in the US.
The greenback is extending its losses against the swissie since the last several days, leading the pair USDCHF to fall back below the 38.2% Fibonacci retracement. The stochastic chart shows that the %K line (blue line) has crossed over the %D line (read line). As the bullish power dies down, the pair USDCHF is likely to get out of the overbought territory.
Buy Digital Put Option from 0.97585 to 0.97423 until 20:00 July 01, 2016
EURJPY has been stuck in a narrow up channel after hitting a record low of 109.398 one week earlier. RSI (14) hovers around the average point, indicating that the market is stepping cautiously. The pair is expeced to continue its current up move for a while as the two moving averages are still under the price.
Buy Digital Call Option from 114.825 to 115.362 until 20:00 July 01, 2016
AUDNZD has formed a rectangular sideways channel on the price chart and is still bouncing between 1.05122 and 1.04126. The Stochastic chart indicates that the pair has already approached the oversold territory. Yet a reversal into an uptrend is not likely to occur in the near-term as the %K line and %D line show no signals of crossing. The trend indicator suggests a short position on this pair via a red arrow above the price chart.
Buy Digital Put Option from 1.04265 to 1.04174 until 20:00 July 01, 2016
WTI is on course to climb higher from a low of 4845 formed late yesterday. RSI (14) is struggling above the average level, implying that bulls are in an attempt to hold their momentum against the bear. The two MAs have crossed the price chart, with the long-term SMA 21 firmly under the price chart. This is evidence of an up-move. The price may inch up continuously, heading up to test the firm resistance of 50.58.
Buy Digital Call Option from 49.06 to 49.65 until 20:00 July 01, 2016
The trend indicator has suggested long positions on COPPER since June 20. Up to now, the commodity has witnessed a substantial move of 132 pips. Hence, a reversal into a downtrend is forecast to happen in the near future. Also, ADX (14) has fallen to the reading of 24.5955, along with a shrinking distance between the DI- and DI+. This means that the bull is getting exhausted. The metal is likely to pull back soon.
Buy Digital Call Option from 2.2014 to 2.2205 until 20:00 July 01, 2016
DAX is bouncing back up after testing the support of 9206.08 a few days ago. ADX (14) is at 26.8073, combined with DI+ staying far from DI-. This indicates that the current move is quite strong. However, the index is lingering around 9774.82, a solid area in the price chart. Some consolidation may occur in the near term and the price is expected to be supported by the upward pressure from the two MA’s to break through this zone.
Buy Digital Call Option from 9778.63 to 9812.14 until 20:00 July 01, 2016