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Sep 28, 2016

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Market Analysis

Home » Technical Analysis » Daily Report on September 20, 2016 by Option Banque

Daily Report on September 20, 2016 by Option Banque

Posted by Option_Banque in Technical Analysis - September 20th, 2016 10:03 am GMT

Asian stocks hovered near one-week highs on Tuesday as investors were nervously waiting for the Bank of Japan and the U.S Federal Reserve’s policy decisions tomorrow. U.S equities closed lower overnight after paring earlier gains. The S&P500 inched lower to 2,139.12, the Dow Jones fell 0.02 percent to 18,120.17 and the Nasdaq Composite dropped 0.18 percent to 5,235.03.

Investors are also keeping an eye out for the first debate of the U.S. presidential election which is scheduled for next Monday. According to market sources, traders are “in a cycle in the market where political uncertainty and economic uncertainty are just so high that investors are taking advantage of any move up to sell and any selloff to buy. As a result we’re stuck in a trading range.”

Confidence among U.S. Home builders surged to an 11-month high in September, according to data released on Monday from the National Association of Home Builders/Wells Fargo. The gauge for builder sentiment increased to 65 from a downwardly revised reading of 59 in July, indicating an improving housing market. In its monthly report, NAHB noted that builder sentiment is being bolstered by the presence of “more serious buyers.”

Oil prices tumbled today after Venezuela’s Oil Minister Eulogio Del Pino stated on Monday that global crude supplies needed to fall by 10 percent to match consumption levels, which means producers will need to cut their output by 9.4 million barrels per day in order to resolve the oversupply situation.


Technicals

NZDUSD

NZDUSD is attempting to escape the current sideways trading range from 0.72500 to 0.73150 after a number of failed attempts. The pair fell back into this price range after breaking below the ascending channel. The RSI index has surpassed the 50 threshold, suggesting moves to the upside. The price has just broken above both the MA’s and is attempting to retest the lower boundary of the ascending channel. Still, the resistance at 0.73433 should be watched as a level at which the pair may possibly fail and reverse.

Trade suggestion

Buy Digital Put Option from 0.73433 to 0.73150 valid 20:00 GMT September 20, 2016

EURUSD


EURUSD extended its decline after peaking just above the 38.3% retracement at 1.11894. A weak bull failed to sustain the up moves and had to let go of its strength. The last three bearish candles with long upper shadows indicate a strong bearish sentiment in the market that depresses the price lower whenever it tends to rise. Both the MA’s are placed above the price action and the RSI is well below the neutral threshold at 50. With the bearish sentiment reigning in the market, EURUSD is expected to retest the low at 1.11500

Trade suggestion

Buy Digital Put Option from 1.11700 to 1.11500 valid 20:00 GMT September 20, 2016

EURNZD

EURNZD has been on a slide and may continue to fall further. The short-term MA20 has just converged with the long-term MA50 from above, and the price action broke below both the MA’s from above more than a week ago and continues to head low. This indicates that the downtrend is set to extend further. However, RSI has neared the oversold zone, and the market is approaching an important support level at 1.52110. The market may witness a short term corrective pullback near this level.

Trade suggestion

Buy Digital Put Option from 1.52490 to 1.52110 valid 20:00 GMT September 20, 2016

GOLD

Gold is currently swinging between gains and losses around the level 1315.00 but has been in a downtrend in general. The precious metal has been being constrained under the 20-period moving averages for a while and it seems hard for the price to make a breakout currently amid cautious sentiment on the market. The MA50 has also turned lower and with both MA’s placed above the price action and a lacklustre RSI, the market looks to be lacking any momentum at the moment.

Trade suggestion

Buy Digital Put Option from 1315.00 to 1312.00 valid 20:00 GMT September 20, 2016

BRENT

Brent crude once again collapsed from the 23.6% Fibonacci level at 46.74 and fell back under the MA20. The steep drop has pushed the market into the oversold zone and a brief period of the market consolidating sideways to upwards on short covering may last until the crude resumes its slide. With both MA’s placed above the price action and the stochastics not indicating an end to down-move just yet, the market may continue moving lower.

Trade suggestion

Buy Digital Put Option from 45.70 to 45.30 valid 20:00 GMT September 20, 2016

NASDAQ

NASDAQ100 index could not resist the pressure of the record high at 4843.89, plummeting decisively to last Friday’s low at around 4790.30. The slide only slowed down after the prices hit the MA20 and bounced back. The ADX index has fallen back below 20, showing that no clear trend is being formed in the market as yet. The short and long term MA’s are still placed below the price action providing support to the market. However the market seems to be getting top heavy near the highs.

Trade suggestion

Buy Digital Call Option from 4790.30 to 4815.20 valid 20:00 GMT September 20, 2016

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