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Sep 25, 2016

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Market Analysis

Home » Technical Analysis » Daily » Daily Report on September 22, 2016 by Option Banque

Daily Report on September 22, 2016 by Option Banque

Posted by Option_Banque in Daily - September 22nd, 2016 10:30 am GMT

Asian stocks extended their rally on Thursday for a sixth consecutive trading session, supported by accommodative monetary policies in the U.S., Europe and Asia. The MSCI Asia Pacific Index was up 1.3 percent, taking its cue from the rally on Wall Street overnight after the U.S Federal Reserve echoed the stance adopted by other central banks in maintaining accommodative monetary policy.

The Fed held its target rate for overnight lending between banks in a range of 0.25 percent to 0.50 percent after its two-day meeting that ended on Wednesday. The central bank still indicated a rate hike by the end of this year, but its projection for the number of rate increases next year was trimmed to two from three. While the Nasdaq closed at record highs, all 11 major sectors making up the S&P500 index finished in the green with the best performance coming from the energy sector.

Crude oil gained following an unexpected drop in the weekly crude oil inventory data reported by the U.S. government. The Report by the U.S. Energy Information Administration (EIA) on Wednesday reported that domestic crude inventories fell by 6.2 million barrels last week – for the third week in a row. The commodity continued to rally on Thursday, boosted by the decline in the dollar. Other industrial metals such as copper, aluminum and zinc also climbed.

The New Zealand Dollar weakened after its central bank stated that further policy easing is expected. The Reserve Bank of New Zealand held the official cash rate unchanged at 2 percent on Thursday, but reiterated that “Further policy easing will be required to ensure that future inflation settles near the middle of the target range.”

Technicals

USDCHF

USDCHF fell through the price range between the resistance at 0.98170 and the support at 0.97803, which marks the 38.2% retracement level. The US Dollar plunged sharply under the influence of aggressively bearish forces, which can be seen in the long bodies of the down candles. The MA20 has penetrated the long term MA50 from above, in addition to the price action crossing through both the MA’s from above. Currently both MA’s are placed above the price action and the RSI index is beginning to head lower, suggesting that USDCHF may fall deeper towards the 23.6% retracement level.

Trade suggestion

Buy Digital Put Option from 0.97000 to 0.96512 valid until 20:00 GMT September 22, 2016

NZDUSD

NZDUSD is trading in an ascending channel running parallel to the previous upward trading range. In fact, the lower boundary of earlier last range has turned into the resistance for the current channel. While the RSI indicates that buyers are overshadowing sellers, the stochastic chart is indicating a possible pullback, with the %K line crossing over the %D line from north to south. The RSI index is in neutral territory currently. Trade against the generally upward direction prevailing currently, need to wait for more signals, at least till the RSI surpasses the 50-line.

Trade suggestion

Buy Digital Put Option from 0.73230 to 0.72900 valid until 20:00 GMT September 22, 2016

EURCAD

EURCAD appears to be in the final stages of a head and shoulders pattern. The pair is heading downwards to the support at the 50% Fibonacci retracement level at 1.45631 after pulling back from over five-month highs at 1.48700 – that was reached mid-September. The slide has sent the pair trading below the two moving averages. The MA20 has converged with the MA50 from above, suggesting further declines. The price action has also broken below both the MA’s from above, indicating a bearish setup.

Trade suggestion

Buy Digital Put Option from 1.46300 to 1.45631 valid until 20:00 GMT September 22, 2016

SILVER

Silver is experiencing some corrective moves after breaking out of the recent consolidation period and breaching the 23.6% retracement at 19.367. The sharp rally quickly exhausted bulls and has pushed the market in an overblown/overbought state. Silver has retreated from the highest level since September 08 at 19.859. With upward support from the two MAs below, the grey metal is expected to reverse and re-attempt the high at 20.100

Trade suggestion

Buy Digital Call Option from 19.850 to 20.100 valid until 20:00 GMT September 22, 2016

WTI

WTI crude has moved past the 23.6% level at 45.56 after vigorously soaring from the lows at 43.00. The market state reversed from near oversold to almost overbought. The commodity consequently had to retreat to gather itself and regain some bullish momentum. Further advances have been confirmed by the 20-period moving average that has converged with the MA50 from below, with both MA’s firmly underpinning the current up-move.

Trade suggestion

Buy Digital Call Option from 45.80 to 46.50 valid until 20:00 GMT September 22, 2016

FTSE

The FTSE100 is currently moving sideways, but in general, the index has been ticking upwards to retest the resistance at 6880.00. Coupled with the RSI index that is hovering in bullish territory, the %K line has reversed and penetrated the %D line from below, indicating that buyers are dominating the market. The two MAs placed below the price action are forecast to consolidate the uptrend.

Trade suggestion

Buy Digital Call Option from 6880.00 to 6955.00 valid until 20:00 GMT September 22, 2016

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