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Home » Technical Analysis » Daily » Daily Report on October 18, 2016 by Option Banque

Daily Report on October 18, 2016 by Option Banque

Posted by Option_Banque in Daily - October 18th, 2016 10:09 am GMT

Daily Report on October 18, 2016

Asian markets nudged higher on Tuesday as oil prices firmed. The US Dollar Index however, weakened after mixed data on Monday and a speech from Federal Reserve Vice Chairman Stanley Fischer that outlined some factors that have been contributing to keeping interest rates low.

In a report released by the Federal Reserve Bank of New York on Monday, data indicated that the manufacturing activity index fell to -6.8 in October, after contracting to -2 in September. The Empire State index turned more pessimistic in October and posted the weakest reading since May, which is unlikely to bolster the case for a rate hike.

U.S shares closed lower on Monday. Anxiety over the U.S presidential election with the last and final presidential debate scheduled on Wednesday, the unclear situation of the Chinese economy, and risks of accelerating inflation raised risk aversion on Wall Street yesterday. Investors can be expected to close out more positions and move to the sidelines today, as a batch of Chinese economic data is slated to be published early tomorrow. The sell-off last week as a result of weak trade data from China trigger a higher degree of risk aversion among investors.

Oil prices rose in early Asian trade today, and the commodity dependent Australian Dollar was helped by the rise in the oil price, as well as the release of the minutes from the RBA’s last meeting. According to the minutes, economic expansion is forecast to continue and stimulate job creation which will eventually result in higher wages and reasonable inflation. The Reserve Bank of Australia held rates unchanged at 1.5% in its October meeting and is widely expected to temporarily pause its rate cut plans at its next meeting on November 1st.

The New Zealand dollar also surged today after data showed inflation last quarter was stronger than economists had forecast. Statistics New Zealand reported on Tuesday that consumer prices rose 0.2 percent from the previous quarter, compared with the median forecast for no change in the three-month period until September.



USDCAD has extended its downtrend from as high as 1.33062 recorded last Thursday. The pair has been on track to complete the double top pattern after prices fell below the neck level at 1.31400. The price has broken below the upwards slopping support trendline that connects higher lows, and the short-term MA20 has crossed the long-term MA50 above the price action. The pair is expected to extend its down moves. However, since RSI has neared the oversold zone and the stochastic lines have even entered the oversold territory, a pullback will soon occur.

Trade suggestion

Buy Digital Put Option from 1.30900 to 1.30500 valid until 20:00 GMT October 18, 2016


AUDUSD has been enjoying a strong rally that brought the pair from as low as 0.75058 to surge more than 160 pips to surpass two important Fibonacci levels at 38.2% and 23.6%. On the path higher, the pair fell into a corrective pull back at one time but was supported by the two MAs placed below the price action. The Aussie is facing a firm resistance at 0.76730 which was the shoulder level in the last price cycle. However, with the wide gap between the %K line and the %D line, and an ADX index that has soared to 37.24, a breakout higher is expected.

Trade suggestion

Buy Digital Call Option from 0.76730 to 0.77000 valid until 20:00 GMT October 18, 2016


EURNZD has fallen below the major support at 1.53400 – the level that has forced the price to reverse higher since late September. However, the pair seems to be attempting to crawl back above this handle as the market has been trapped in the oversold territory for a while. With the ADX at an extremely high level at 62.65, a rebound upwards is anticipated.

Trade suggestion

Buy Digital Call Option from 1.53500 to 1.54775 valid until 20:00 GMT October 18, 2016


Sugar has been trading sideways within a shrinking range. As can be seen from the indicator windows, while RSI has swung back and forth around the 50 line, the ADX has also remained below 20, which indicates no clear trend being formed in the market. However, we can see that sugar has consistently been supported by the long-term MA50 which is placed below the price action. The commodity, as a result, may surge a little higher today.

Trade suggestion

Buy Digital Call Option from 23.20 to 23.50 valid until 20:00 GMT October 18, 2016


Brent crude has bounced back from the support at 51.30 for the fourth time in nearly two weeks. As can be observed from the chart, lower highs are being formed and every effort by buyers to push the price higher is soon wiped out by the sellers. This suggests that there may be less room to buy or sellers are overshadowing the market currently. Despite recent up moves, the upside seems limited as the price action has hit the resistance zone at the short-term MA20 which is placed above the price action. If the 51.30 level is breached, the commodity may fall to as low as 50.00.

Trade suggestion

Buy Digital Put Option from 51.70 to 51.30 valid until 20:00 GMT October 18, 2016


Euro Stoxx 50 index created a gap up on the market open today. We have also received signals for further rallies in the index. Not only has RSI index surpassed the 50-line but the %K line has also penetrated the %D line from below, suggesting upside momentum. Still, the upside is not likely to be strong enough to help the index break out of the recent trading range, whose upper boundary is at around 3038.00.

Trade suggestion

Buy Digital Put Option from to valid until 20:00 GMT October 18, 2016

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