After Yellen’s speech overnight, the greenback is on track to recovering slightly, but still hovering around the three-month low. The dollar index DXY closed Monday’s trading session at 94.03, only 20 points higher than the previous settlement.
At the World Affairs Council meeting in Philadelphia, the FED Chief said that she still saw good reasons for a positive growth in employment despite the disappointing data from the Non-farm employment report in May, which was released on Friday. She also commented that the central bank would increase interest rates, but did not refer to the timing. Currently, markets are pricing that a rate hike this month has a 2% chance and July is at 27.5%. The odds for raising rates by the December meeting are at less than 50%.
Early this week, Markit published the retail PMI for the euro area, which came in at a higher-than-average reading in May after falling in each of the two prior months. The latest data came in with a reading of 50.6, the highest level since last November. This marks an improvement compared with the 47.9 reading in April.
Results from the Reserve Bank of Australia (RBA) meeting on Tuesday reported that the central bank decided to keep its benchmark rate unchanged at 1.75. This decision matched with economists’ forecast of an unchanged rate in June. The RBA Board stated that the current policy would be consistent with the target of maintaining sustainable growth in the country’s economy and inflation returning to the target level over time.
In the Asian trading session today, oil prices are moving around seven-month highs amid the crippling attacks on Nigeria’s oil industry and fresh draws in US crude inventories. The West Texas Immediate crude last settled at $49.82 per barrel, half a dollar lower than the record high created on May 26.
EURUSD is currently moving around the area of 1.13567 after rising sharply from the support of 1.11343 since last Friday. RSI (14) has escaped the overbought territory but still hovers around this threshold, indicating that the bullish power is still strong. The pair is supposed to move sideways for the rest of the day before beginning a new trend. The resistance ar 1.13926 is expected to be tested again.
Buy Digital Call Option from 1.13537 to 1.13926 valid until 20:00 June 7, 2016
The pound surged up strongly against the yen, leading this pair to get out of the oversold territory after a considerable period. The price is tracing an up-move from an eight-week low of 152.951. An increasing RSI (14) implies that the bull is knocking at the door. The trend indicator has suggested a short position since the first day of June, with a significant move of 247 pips up to now. Hence, the pair is anticipated to extend its current movement and surge higher.
Buy Digital Call Option from 156.449 to 157.794 valid until 20:00 June 7, 2016
The greenback is moving sideways, pausing for breath after a steep dive to hit a low of 1.28019 on friday. The stochastics chart shows that the pair has plunged into the oversold territory for a period of time and the %K line (blue line) has caught up with the %D line (red line). The price is expected to consolidate for a while before resuming the downtick, taking the pressure from the two moving averages above.
Buy Digital Put Option from 1.28063 to 1.27660 valid until 20:00 June 7, 2016
SILVER is stuck in a narrow range due to an uncertain greenback. A green arrow has appeared under the price chart since June 03, signaling a long position in the commodity. The price is forecast to attempt the resistance of 16.626, around the area of the level 50.0% of Fibonacci retracement.
Buy Digital Call Option from 16.442 to 16.571 valid until 20:00 June 7, 2016
COPPER is on course to tumble down significantly after reaching a month high of 2.1439 early yesterday’s trading session. RSI (14) got out of the overbought territory and heads down the reading of 39.7229, implying that the bearish force is overwhelming. The two moving averages are crossing the price chart, preparing to cast shadow on the commodity. The support of 2.0502 is supposed to be tested once again.
Buy Digital Put Option from 2.0745 to 2.0586 valid until 20:00 June 7, 2016
The stochastics chart shows that SP500 has been close to the overbought territory for a while but there are no signals of a pull back as the %D line and %K line are still separated. The index is moving up after testing the support of 2083.25 once again, and failing to break this level. A long position in short-term is encouraged.
Buy Digital Call Option from 2109.60 to 2119.33 valid until 20:00 June 7, 2016