Oil prices dropped significantly on Monday due to a stronger greenback and concerns on global oversupply. OPEC member Iran stated that it was planning to raise its oil export capacity to 2.2 million barrels in the summer and has no intention of cutting production and exports, indicating further abundance on the production and supply side.
Brent futures were trading at $48.54 per barrel, losing 18 cents compared with the last settlement. Likewise, WTI crude futures were down 26 cents to as low as $48.15 per barrel after losing 41 cents in the previous session.
Today, the dollar fell against its Japanese counterpart despite falling Tokyo stocks. Japan reported a larger-than-expected trade surplus in April. The greenback was trading at 109.720 JPY, down 0.5% from 110.59 – the highest level in 3 weeks, that was reached on Friday. According to the data on Monday, the Japanese trade balance in April was 823.5 billion yen, beating market forecasts of 492.8 billion yen. This is the third consecutive month that Japan has witnessed a trade surplus. More goods exported than imported is expected to help Japan improve its manufacturing sector and “rescue” the yen from another rate cut.
Last week, the dollar was strongly supported by the speech from New York Federal Reserve President William Dudley that the US economy could be strong enough to cope with a rate hike in June or July. The comment has helped reinforce investor belief that another interest rate increase is totally possible. Today, the market is awaiting speeches from a number of Fed officials including James Bullard, John Williams and Patrick Harker for more clues about the next monetary policy move.
Gold stayed steady on Monday on a weaker dollar and solid Asian stocks. The commodity hovered around the lowest level in three weeks of 1242.53 on expectations that the Fed will raise its interest rates as early as June.
Fig. GBPUSD H4 Technical Chart
GBPUSD has dropped to as low as 1.44811 after hitting the resistance level at 1.46654. RSI is lingering around level 43 and on track to form a downtrend. Despite the support of the parabolics sar movement below, the pair is expected to retest the resistance area at 1.46654, created on May 19, 2016.
Buy Digital Call Option at 1.43983 valid until May 27, 2016
Buy Digital Put Option at 1.44811 valid until May 27, 2016
Fig. EURJPY H4 Technical Chart
EURJPY has been moving in a range between the levels of 122.569 and 124.178 since the beginning of the month. RSI is staying at level 40 and pointing down, indicating that the pair is about to enter the oversold territory. Despite the green arrow’s buying signal, the price is expected to retest the support level at 122.569, the lowest level in more than 10 days.
Buy Digital Call Option at 122.569 valid until May 27, 2016
Buy Digital Put Option at 122.844 valid until May 27, 2016
Fig. AUDNZD H4 Technical Chart
AUDNZD has been in a bearish market since the appearance of the red arrow above the price movement. The pair is about to hit oversold territory as seen in the RSI staying at level 31 and pointing down. With the pressure of the moving average above, the price is forecast to continue going down further. A bearish position is encouraged.
Buy Digital Call Option at 1.05854 valid until May 27, 2016
Buy Digital Put Option at 1.06322 valid until May 27, 2016
Fig. SILVER H4 Technical Chart
After moving sideways around 16.484 for 4 days, silver dropped to the lowest level in more than a month at 16.344. RSI is at 29, indicating that the pair is in the oversold territory. With the pressure of the red parabolics sar above, the price is anticipated to break through the trough of 16.344 and test the next support at 16.121, created on March 18.
Buy Digital Call Option at 16.121 valid until May 27, 2016
Buy Digital Put Option at 16.365 valid until May 27, 2016
Fig. WTI H4 Technical Chart
WTI has been in a bullish market with support from the green parabolics sar movement below. However, RSI is staying at level 45 and pointing to the oversold zone, suggesting strong selling power. With the pressure of the short-term EMA above, the commodity is expected to hit the support level at 47.28 then bounce back and continue the overall uptrend.
Buy Digital Call Option at 47.28 valid until May 27, 2016
Buy Digital Put Option at 47.98 valid until May 27, 2016
Fig. DAX H4 Technical Chart
DAX is hovering around the zone of Fibonacci retracement 38.2% with the support of the moving average below. RSI is at level 56 and pointing up, suggesting a strong buying trend. Despite the red parabolics sar movement above, the price is anticipated to hit the area of Fibonacci 50.0% (around 10,108.63) before pulling back.
Buy Digital Call Option at 9972.25 valid until May 27, 2016
Buy Digital Put Option at 10108.63 valid until May 27, 2016