Daily Report on October 05, 2016
Asian markets were mixed on Wednesday after U.S stocks closed lower on Tuesday as investors worried about uncertainties triggered by the leaving of the U.K from the European Union, upcoming U.S rate hikes and a tight race between presidential candidates ahead of the Nov. 8 election.
U.S equities extended losses to the second straight session. The Dow Jones fell 0.47 percent to finish at 18,168.45, the S&P 500 lost 0.5 percent to 2,150.49, and the Nasdaq Composite dropped 0.21 percent to 5,289.66. The equity markets are expected to focus their attention towards the upcoming third-quarter results from companies over the next few weeks.
The National Retail Federation on Tuesday forecast that U.S. consumers would boost this year’s holiday sales 3.6% higher. The retail industry group believed that the growth in employment rate and disposable income will help sales in November and December to reach $655.8 billion, out of which online sales are likely to contribute as much as $117 billion, reflecting a rise of 7 percent compared to the same period last year.
Oil prices rose in early trading on Wednesday after a report by the American Petroleum Institute (API) late on Tuesday showing that U.S. crude inventories likely fell for a fifth straight week, declining by 7.6 million barrels. The U.S. government’s Energy Information Administration (EIA) will report official stockpile numbers later today.
The New Zealand dollar slumped after dairy product prices fell for the first time since July at the Global Dairy Trade auction. The GDT price index declined by 3 percent to US$2,880, down from US$2,975 at the previous auction two weeks ago.
EURUSD once again bounced back from the support at 1.11500, remaining stuck within the range between the lower boundary 1.11500 and the resistance at 1.12500. The price action has crossed over two MAs but long bodies in the last four candles suggested that aggressive moves may cause the bull to get exhausted soon and force the pair pull back at the major level 1.12500.
Buy Digital Put Option from 1.12500 to 1.11890 valid until 20:00 GMT October 05, 2016
The US dollar is struggling under the 103.000 threshold against the Japanese Yen. The pair breached the resistance at 101.850 yesterday and kept surging strongly since then. Consistent rally sent the exchange rate to reach four-week highs and opened the chance for investors to take profit. The %K line which has crossed over the %D line in the overbought zone showed the weakening of bulls. Nonetheless, two MAs are heading upwards, suggesting a continual uptrend after a period of correction.
Buy Digital Call Option from 103.000 to 103.500 valid until 20:00 GMT October 05, 2016
AUDNZD surged high to reach nearly one-month high at 1.06322. The pair has pulled back after hitting this level as can be seen in the RSI chart, buyers have outweighed sellers and sent market into the overbought zone. However, with ADX at high level at 33.19 and the divergence between the +DI and –DI line, the pair is expected to re-attempt the 38.2% level at 1.06538.
Buy Digital Call Option from 1.06300 to 1.06530 valid until 20:00 GMT October 05, 2016
Brent is facing an important resistance at 51.45 – the highest level since August 18th. Small steps in early trade on Wednesday indicated the cautiousness of traders ahead of the new released later on the day. If the data come out in favour of an uptrend, a surge above this level may trigger buy stops. Otherwise, the commodity will have to reverse lower.
Buy Digital Call Option from 51.45 to 52.00 valid until 20:00 GMT October 05, 2016
From the chart we can see that the short-term 20-period moving average has converged with the long-term 50-period MA above the price action, which confirmed the downtrend. The pair has fallen below the 38.2% level and is expected to plunge into the trading range between 2.1440 and 2.1640.
Buy Digital Put Option from 2.1640 to 2.1440 valid until 20:00 GMT October 05, 2016
U.S Nasdaq 100 index seems to be on the last stage of a double top pattern as prices have fallen below the neck level at around 4847.10. The pair pulled back on the ahead of market close yesterday but is likely to resume the downtrend on Wednesday after moving past both MAs. The short-term MA20 looks set to penetrate the long-term MA50 from above, while RSI stays below 50 line, suggesting overwhelming bears in the market.
Buy Digital Put Option from 4850.00 to 4817.80 valid until 20:00 GMT October 05, 2016