Daily Report on September 27, 2016
Asian markets bounced back from early losses as financial markets unanimously agreed that Hillary Clinton had won the first of the three presidential debates. The MSCI Asia Pacific Index rose 0.5 percent, having recovered from a loss of as much as 0.9 percent. Japan’s Nikkei 225 also swung 0.3 percent higher, having been down 1.5 percent.
Data from Chinese National Bureau of Statistics on Tuesday showed that profits of China’s industrial corporations surged the most in the last three years. Industrial profits jumped by 19.5 percent in August from a year earlier to 534.8 billion yuan ($80.2 billion), which added to evidence of continued stabilization in manufacturing.
Speaking in parliament earlier today, Japanese Prime Minister Shinzo Abe stated that the Bank of Japan’s new policy framework was intended to strengthen monetary policy and to achieve its 2 percent inflation target at the earliest possible time. Abe expressed his trust in BOJ Governor Haruhiko Kuroda and said specific policy steps should be left up to the BOJ.
Yesterday, the U.S Commerce Department reported that purchases of new U.S. homes dropped in August after surging a month earlier to the fastest pace since 2007. Home sales fell 7.6 percent to 609,000 on an annualized basis last month, from a revised annualized reading of 659,000 in July.
USDCHF retreated from the major resistance at 0.97000, where the pair also hit the short-term MA20. Last Friday, the U.S dollar made a breakout from this level and reached another resistance at 0.97400. But as can be seen from the price action, a strong bearish influence has been reigning in the market and has wiped out the bullish sentiment. The pair fell back below the 0.97000 handle and is expected to retest the 23.6% retracement level.
Buy Digital Put Option from 0.96800 to 0.96514 valid until 20:00 GMT September 27, 2016
NZDUSD has surged dramatically about 100 pips from the lows at around 0.72200 and is attempting to get back into the ascending trading channel which had contained the price range in the mid-late September period. Although the RSI has surpassed the 50 line, we can see that the market has entered the overbought zone. It seems challenging for the pair to go far from the current level. Therefore, a decline is expected.
Buy Digital Put Option from 0.73200 to 0.72900 valid until 20:00 GMT September 27, 2016
USDJPY remained in bearish territory as the pair failed to cross over the 20-period moving average. Long upper shadows of the last two candles indicate an overwhelming bear that has been creating lower highs on the price chart. The next support to be tested is at 100.000.
Buy Digital Put Option from 100.500 to 100.000 valid until 20:00 GMT September 27, 2016
Gold has been stuck between the support at 1333.60 and the resistance at 1342.00 since last Thursday. The ADX index has hit the lows at around 23.66. Nonetheless, the relative strength index is pointing upwards and continues to stay above 50, suggesting a market in favor of the bulls.
Buy Digital Call Option from 1337.50 to 1342.00 valid until 20:00 GMT September 27, 2016
Brent crude declined towards the 23.6% Fibonacci retracement level at 46.74 after vacillating strongly yesterday. Aggressive market volatility prompted the commodity to break through this handle easily but the same is not expected to repeat today. A bullish market is anticipated to support the price to advance further after testing the 23.6% level.
Buy Digital Call Option from 46.74 to 47.60 valid until 20:00 GMT September 27, 2016
The Dow opened the market with a gap up on Tuesday but is heading downwards to cover the gap. The index is still below the upward sloping trendline connecting higher lows since September 12, after having broken below this support yesterday, sending the market into an oversold state. The market may re-attempt yesterday’s low at 18086.60 but is not likely to fall further beyond this level.
Buy Digital Call Option from 18086.60 to 18330.00 valid until 20:00 GMT September 27, 2016