Daily Report on September 28, 2016
Crude prices slumped on Wednesday as investor worries were reignited over no agreement being reached regarding an output cap or a new output ceiling between oil producers at the informal meeting between major producers in Algiers, that ends later today. News that Iran rejected an offer from Saudi Arabia to limit its oil output in exchange for Riyadh cutting supply outweighed data from API which showed a surprise draw-down in U.S. crude stocks.
The American Petroleum Institute reported that crude oil stocks dropped by 752,000 barrels in the week ended Sept. 23rd, to 506.4 million barrels, compared to analyst estimates for a 2.8 million-barrel build.
In an interview at his bank’s headquarters on Tuesday, San Francisco Federal Reserve Bank President John Williams stated that the Fed can raise interest rates without restraining the U.S. economic recovery, and that the central bank risks causing more harm by keeping rates too low for too long. “There are risks to pushing things too far”, he said.
In its monthly report on Tuesday, market research group the Conference Board indicated that U.S. consumer confidence unexpectedly jumped in September to a more than nine-year high. The gauge of consumer confidence surprisingly increased to 104.1 this month from a reading of 101.8 in August. This month’s reading was its highest level since August 2007.
Meanwhile, China’s economy is expected to grow at an annual pace of 6.6 percent in the fourth quarter this year, the China Academy of Social Sciences (CASS) said. CASS also forecast an overall growth of 6.7 percent for the full year, which was in line with the government’s own full-year forecasts of 6.5-7 percent growth.
EURUSD fell off from over one-week highs at 1.12785 and is sliding back towards the 23.6% Fibonacci retracement level at 1.11891. As can be seen from the price chart, the price has broken out of the recently formed ascending trading range and at the same time moved past the MA50. The support at the 23.6% level is within sight but is much likely to be broken through, especially with a market that has already entered the bearish territory.
Buy Digital Put Option from 1.11890 to 1.11500 valid until 20:00 GMT September 28, 2016
USDCAD has been swinging between gains and losses around the major level 1.32000 since the start of this week. In general, the USDCAD market remains in a bullish setup with the RSI currently above the 50 line while the two moving averages are placed below the price action and supporting the up moves.
Buy Digital Call Option from 1.32200 to 1.32800 valid until 20:00 GMT September 28, 2016
The British Pound is steadily losing ground again the Australian dollar but the pace of declines is becoming slower. However, sellers are expected to continue to overwhelm the market as the stochastic chart has not shown any sign of a pullback yet. Both MA’s are placed above the price action which is creating further overhead pressure for the market. In the event of a continual downfall, the support at 1.68700 is within the sight and likely to be tested.
Buy Digital Put Option from 1.69300 to 1.68700 valid until 20:00 GMT September 28, 2016
U.S light, sweet crude has been swinging back and forth between the support at 44.50 and the resistance created by the trendline connecting higher highs since August 19. The price bounced back again after hitting the support line but is heading downwards back to this handle and is expected to make a breakout as the two MAs have converged above the price action. The Relative Strength Index which is below 50 also confirmed a bearish tone in the market.
Buy Digital Put Option from 44.50 to 43.85 valid until 20:00 GMT September 28, 2016
Silver seems to be completing the double top pattern after reversing lower from the two-week high at 20.046. The price is around the neck level and may fall deeper as the short-term MA20 has penetrated the long-term MA50 from above. Additionally, ADX has soared higher to a level of 39.22, suggesting further declines.
Buy Digital Put Option from 19.960 to 18.765 valid until 20:00 GMT September 28, 2016
In general, the Nasdaq 100 index has been in an uptrend. The price has never fallen below the short-term MA20 or the long-term MA50 since mid-September, and is heading for the record high at 4894.81 created last Thursday. The index is anticipated to retest this level but it still seems uncertain whether the price can set a new record as the market has remained close to or within the overbought territory. A pullback may be expected.
Buy Digital Call Option from 4875.00 to 4894.81 valid until 20:00 GMT September 28, 2016