Daily Technical Analysis by Capital Street FX

Will Climate Change Create A Sugar Famine? Longs Suggested As Global Supply Squeezed

Sugar retreated from four-year highs at 22.28 cents per pound reached earlier today. The commodity has surged more than 40% since the start of this year owing to the El Nino weather phenomenon that has disrupted production in major sugar producing countries and caused a shortfall in the 2015/2016 season.
Researchers are forecasting a global deficit of 7.2 metric tons in the upcoming 2016/17 season after a 7.9 metric ton shortage this season. Sugar output from Brazil’s main central and southern sugarcane growing regions in the second half of August dropped by 14% from the first half of last month to 2.54 metric tons.
Furthermore, a significant strengthening in the Brazilian Real (the local currency) based on belief that the new federal administration will succeed in stabilizing the economy and re-attracting investment, has made the local sugar price less attractive for farmers in the world’s top sugar producer.

Trade suggestion
Buy Stop at 22.10, Take profit at 22.28, Stop loss at 21.90

https://capitalstreetfx.com/en/wp-co...ner_report.jpg

Daily Report on September 21, 2016

Crude Prices Rally As Inventories Fall – All Eyes On FOMC

Oil prices extended gains on Wednesday, supported by a draw-down in U.S. crude inventories and firm import data from Japan. The American Petroleum Institute data on Tuesday reported that U.S oil stocks decreased by 7.5 million barrels last week to 507.2 million barrels, registering the third weekly draw-down in inventories.

Adding to the bullish sentiment in the crude oil market, the Ministry of Finance (MOF) on Wednesday reported that Japan’s crude oil imports rose 0.5% in August from the same month a year earlier. On average, the world's fourth-biggest crude oil buyer imported 3.38 million barrels per day last month.

In the same report, the MOF stated that Japan's exports fell 9.6 percent from a year earlier to 5.316 trillion yen, due to a strengthening Japanese Yen and weak overseas demand. Japanese exports have been sluggish for 11 consecutive months, while imports also declined 17.3% from a year before to 5.335 trillion yen.

In the U.S, new home construction fell by 5.8% in August to a 1.14 million annualized rate, as a plunge in the South, the biggest region for building, outweighed gains in the rest of the country. The report from the Commerce Department on Tuesday also indicated that building permits dropped 0.4% to a 1.14 million annualized rate. Both readings fell short of expectations.

The New Zealand dollar retreated overnight, after Fonterra Co-operative Group, the world's biggest dairy exporter, announced that the Fonterra's GDT Price Index climbed 1.7 percent in the auction held on Tuesday. The average international selling prices for milk rose to $2,975 per ton while volumes dropped 4.6% from the first auction this month to 35,086 tons.

Technicals

GBPUSD

Fig: GBPUSD H4 Technical Chart

The British Pound has been falling steeply over the last week or so, paring most of its gains in the period from mid-August to early September. The pair has broken through the ascending channel and the trendline support connecting the notable highs registered between late July and August. Lower lows created recently on the price chart, alongside with lower lows that have been formed on the indicator chart, indicate overwhelming bearish force in the market. The price action has broken through both the MA's from above and both MA's are now placed above the price action creating further pressure on prices.

Trade suggestion

Sell Stop at 1.29450, Take profit at 1.29000, Stop loss at 1.30000

USDCAD

Fig: USDCAD H4 Technical Chart

USDCAD is moving along the 20-period MA. The pair has not been able to decisively breach this zone of support and has had to reverse higher every time it tends to make a crossover through the MA from above. Bulls have kept the market in the bullish territory for quite a long time and the market is forecast to extend the rally as no fundamental factor will show up until the U.S session. The RSI is placed near the neutral threshold and therefore the market is expected to persist along the current path.

Trade suggestion

Buy Stop at 1.32000, Take profit at 1.32400, Stop loss at 1.31600

GBPCHF

Fig: GBPCHF H4 Technical Chart

GBPCHF has been suffering some selling pressure recently after the pair started retreating from the two-month high at 1.31192 created on September 6. The pair is struggling around the 61.8% Fibonacci level at 1.27024 and is under downward pressure from the two MAs placed above the price action. The market seems to be in a period of consolidation with indicators providing little clarity in terms of decisive direction. GBPCHF is expected to make a break through the 61.8% level to the downside, after completing the consolidation as up-moves are struggling to register any significant levels.

Trade suggestion

Sell Stop at 1.27020, Take profit at 1.26250, Stop loss at 1.27500

WTI

Fig: WTI H4 Technical Chart

U.S crude price has breached the resistance at 44.50 but the up-moves are threatened by the two resistance lines connecting recent highs of significance between the August/September period. The market is in a bullish formation for the first time since last Tuesday, after the price action crossed over both the MA's from below and the RSI providing a confirmation as well. Fundamental data and short-covering are on course to push the commodity towards the 23.6% retracement level at 45.56.

Trade suggestion

Buy Stop at 45.00, Take profit at 45.56, Stop loss at 44.50

COTTON

Fig: Cotton H4 Technical Chart

Cotton has been on a steady rise but currently witnessed some corrective moves after reaching over one-week highs at 70.75 at the market open today. The commodity not only created a gap up in the early Asian session but also covered the gap and is pointing downwards to the 38.2% retracement level at 70.00. As technical indicators are suggesting further advances, the 38.2% level is forecast to be a firm support that will force cotton prices to reverse higher.

Trade suggestion

Buy Limit at 70.00, Take profit at 71.50, Stop loss at 69.30

Dow Jones

Fig: Dow Jones H4 Technical Chart

Dow Jones’ trading range has been shrinking since last Monday and the price action is now in a triangle of congestion. The index has continuously created big gaps on the market open recently, indicating an unstable sentiment among investors. The RSI and Stochastic are nowhere near providing any decisive indications of the state of the market A breakout can be expected through either side with equal probability as the collapse in daily volatility is bound to be followed by a major move in either direction as the triangle resolves itself.

Trade suggestion

Buy Stop at 18250.00, Take profit at 18355.00, Stop loss at 18120.00

Adobe Systems On Cloud 9 – Cloud Computing Powers Profits – Buying Suggested

Adobe Systems Inc. looks set to open the U.S session with a gap up on Wednesday after the company reported better-than-expected earnings for the third quarter following the market close yesterday.

For the fiscal quarter ending August 2016, the software company posted earnings of $270.8 million, or 54 cents per share, up from $174.5 million, or 34 cents per share for the same quarter in 2015. Excluding certain items, Adobe’s earnings per share rose to 75 cents, reaching the top end of its forecast range from 69 cents to 75 cents.

Revenue rose 20.4% on a yearly basis to $1.46 billion, thanks to record revenues of $990 million in the Digital Media Solutions segment. Within the segment, the Creative Cloud (CC) and Document Cloud (DC) categories contributed $803 million and $187 million in revenue, respectively, reflecting the effectiveness of the focus towards adoption of cloud technology.

Shantanu Narayen, Adobe president and chief executive officer said that “Our leadership in cloud-based content and data platforms make us a mission critical partner to the world’s biggest brands as they transform how they engage with their customers.”

In a prepared statement, the California-based company’s Chief Financial Officer Mark Garrett stated that he expected “another record quarter” in the current three-month period. Garrett forecast his company’s revenues in the range of $1.55-$1.6 billion for the fiscal fourth quarter, and between $5.8 and $5.85 billion for the whole fiscal year 2016.


Adobe shares soared back above the daily moving averages yesterday, suggesting a short/medium term bottom and a reversal into an uptrend. As can be seen from the ADX chart, bears are getting weakened. While the ADX has lowered to 28.31 from the highs at 50.27, the +DI line has crossed over the –DI line from below. The RSI index has surpassed the neutral 50 line, providing confirmation for the up-trend. The price action has broken through both the MA’s from below and both MA’s should be underpinning the price moves as solid support going forward.

Trade suggestion
Buy Stop at 101.70, take profit at 104.05, stop loss at 98.50

FedEx Delivers Better Than Expected Profits – Traders Ready To Pack In Long Positions

FedEx Corp. reported better-than-anticipated earnings for the quarter ended August after the closing bell yesterday. The shipping and logistics company’s operational results for the first quarter of fiscal year 2017 topped expectations even though its acquisition of TNT Express NV cost the company nearly $5 billion in May.

FedEx reported $14.7 billion in sales and $715 million earnings or $2.65 a share in the quarter, after deducting 25 cents per share for all the costs associated with TNT.

The package-delivery giant lowered its yearly guidance for the fiscal year ending in May 2017 to a range from $10.85 to $11.35 a share, down from the previous forecast of $11.75 to $12.25, referring the acquisition with TNT and the sluggish global economy as reasons for the adjustment.

Trade suggestion
Buy Stop at 168.00, Take profit at 169.50, stop loss at 166.50

https://capitalstreetfx.com/en/wp-co...ner_report.jpg
Daily Report on September 22, 2016

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
Fig: USDCHF H4 Technical Chart
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
Sell Stop at 0.97000, Take profit at 0.96512, Stop loss at 0.97365

NZDUSD

Fig: NZDUSD H4 Technical Chart
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
Sell Stop at 0.73230, Take profit at 0.72900, Stop loss at 0.73650

EURCAD

Fig: EURCAD H4 Technical Chart
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
Sell Stop at 1.46300, Take profit at 1.45631, Stop loss at 1.47500

SILVER

Fig: SILVER H4 Technical Chart
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 Stop at 19.850, Take profit at 20.100, Stop loss at 19.500

WTI

Fig: WTI H4 Technical Chart
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 Stop at 45.80, Take profit at 46.50, Stop loss at 45.40

FTSE

Fig: FTSE H4 Technical Chart
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 Stop at 6880.00, Take profit at 6955.00, Stop loss at 6816.00

USD/JPY signal

From GMT 08:15 22/09/2016
Till GMT 21:00 22/09/2016

Buy at 100.600
Take profit at 101.200
Stop loss at 100.000

Gold Rally Snaps As Risk Tolerance Rises – Is 1338 Possible?

Gold retreated early in the European session on Thursday. Investors took profits after the rally yesterday that lifted prices by nearly 1.5% on the day, and shifted their attention to riskier assets after the U.S. Federal Reserve kept interest rates unchanged.

Fed Insists on A Rate Hike In 2016

As expected by the majority of market participants, the Fed stood pat on the benchmark rate at the September meeting. The central bank decided to hold its target rate for overnight lending between banks in a range of 0.25 to 0.50%. The Fed stated that the decision did not reflect any lack of confidence in the U.S economy. Policymakers would like to witness more evidence of continued progress towards its goals, before deciding on the next steps.

In the current environment, one of two targets set by the central bank has been reached. The labour market has created an average of 182,000 jobs every month so far this year. Average hourly earnings and participation rate are rising. Nevertheless, inflation is still far below the Fed’s 2% goal. Considering recent disappointing economic data that reflected falling consumer consumption, and weaker activity in the manufacturing and service sectors, the Fed probably needs to leave the low-rate environment intact for some more time to support the economic recovery.

Nonetheless, the central bank also indicated a rate hike by the end of this year. Speaking at the FOMC Press Conference following the rate decision, Fed Chair Janet Yellen said U.S. growth was looking stronger and rate increases would be needed to keep the economy from overheating. According to the CME Group’s FedWatch Tool, traders are pricing in a nearly 60% possibility of a December rate increase.

Gold’s Upside Seems Limited Due To Fading Attractiveness

Gold rose sharply on the deferral of an interest rate hike. A softer dollar, which gold is traded in globally, makes the precious metal less expensive for investors holding other currencies. Low interest rates also boost gold’s appeal as it doesn’t offer a yield and incurs an opportunity cost to the investor for holding it. However, the upside seems limited. Gold’s main function of hedging against risks, is being overlooked as speculators jump into riskier but higher-yield assets such as stocks. Such assets seem to be benefitting from perceptions of a continuation of the low interest rate environment.

On the supply side

Gran Colombia Gold Corp. is forecast to halt production by Friday. A local mining collective, comprised in its majority by illegal miners, convened a strike in Segovia and Remedios, (in which the company’s Segovia Operations are located) and prevented mining activity. Gran Colombia Gold is continuing to produce gold from stockpiles. Still, the supply is limited and not expected to sustain operations into next week.

CEO Lombardo Paredes said that a stoppage could prevent Gran Colombia Gold from reaching a 2016 output target of 145,000 to 150,000 ounces.

Technical Analysis
Gold took off after moving sideways around the 1315 level since the start of this week. The precious metal has successfully breached through the 38.2% Fibonacci retracement at 1330.00. Previously, the strong rally sent the market into the overbought territory. Gold is re-gaining momentum after a slight retreat. Two MAs that have converged and are currently placed below the price action. Thus, the metal is expected to surge and reach the 50.0% level.


Trade suggestion
Buy Stop at 1334.00, Take profit at 1338.50, Stop loss at 1330.00

GBP/CHF signal by Capital Street FX

From GMT 07:35 23/09/2016
Till GMT 21:00 23/09/2016

Sell at 1.26250
Take profit at 1.25750
Stop loss at 1.27000

https://capitalstreetfx.com/en/wp-co...ner_report.jpg

Daily Report on September 23, 2016

Asian shares eased and European shares opened lower on Friday as the U.S dollar rebounded and oil prices cooled down following two sessions of strong rises. The MSCI Asia Pacific Index pared some of the gains from its biggest weekly rally in two months, to trade 0.3% lower, while Japan's Nikkei225 dipped 0.1%. The U.S dollar index, which tracks the strength of the greenback versus a basket of major currencies ticked up 0.14% to 95.50.

Crude prices retreated from two-week highs in early Asian trade, dragged down by a technical sell-off and by cautious sentiment ahead of a gathering of OPEC ministers next Monday in Algeria. On the sidelines of the International Energy Forum, OPEC and non-OPEC members will attend an informal meeting to discuss possible cooperative actions to stabilize the oversupply situation in the oil market.

Data from research group Markit on Friday reported that Japanese manufacturing activity in September expanded for the first time in the last seven months. On a seasonally adjusted basis, the country’s flash Manufacturing Purchasing Managers Index (PMI) rose to 50.3 in the current month from a final reading of 49.5 in August.

In the U.S, jobless claims dropped to their lowest level since July 2015, Department of Labor said on Thursday. The number of individuals who filed for unemployment insurance for the first time during the past week slid to 252,000. The number of weekly jobless claims have remained below the 300,000 level, which is associated with a firming labor market, for an 81st consecutive week,

Technicals

GBPUSD

GBPUSD retreated after the price action hit the downward sloping trendline connecting higher highs since June 29. At the same time, the prices fell back below both the long-term and short-term MA's, indicating that the up moves recorded earlier in the week were a result of profit taking by shorts. GBPUSD is expected to extend the slide as the RSI index has dipped below the 50 line, suggesting a comeback by bears.

Trade suggestion

Sell Stop at 1.30200, Stop loss at 1.31200, Take profit at 1.29500

USDJPY

USDJPY pulled back from the resistance at 101.200 following a period of correction. Bears have jumped in at the right time and restrained the RSI index from breaking above the dividing line between bullish and bearish territory. The price action remains under downward pressure from two MAs placed above the price action. The pair is forecast to re-attempt the support at 100.000.

Trade suggestion

Sell Stop at 100.600, Stop loss at 101.200, Take profit at 100.000

EURCHF

The Euro has reversed higher versus the CHF, after a sharp decline that sent the pair back below the 50.0% Fibonacci level. The stochastic and RSI charts are both indicating that the pair has pulled back from the oversold zone. However, lower lows simultaneously created in the price action and the indicators still suggest a strong bear that is likely to push the pair towards the 38.2% retracement level.

Trade suggestion

Sell Limit at 1.08860, Stop loss at 1.09100, Take profit at 1.08411

Natural gas

Natural gas is moving sideways to ascending pattern, while holding above the support at 2.975, after falling from record highs around 3.090. Long bodies of the bearish candles show the cautious sentiment among investors as the market seems to quieten as it nears the recent highs. We have received a “bounceback” signal from the stochastic chart, which indicates a possible rise in the price. Natural gas may soar back above the short-term MA20, after a brief ongoing test of this level.

Trade suggestion

Buy Stop at 3.010, Stop loss at 2.970, Take profit at 3.030

BRENT

Brent crude is coming off the highs following the strongest rally in the last two weeks. Although the MA20 has penetrated the MA50 from below, the upside in crude prices today seems limited, as buyers who have fueled the surge may attempt to take profits off the table and close out longs ahead of the weekend and the meeting between oil producing nations, right at the start of the next week.

Trade suggestion

Sell Stop at 47.20, Stop loss at 47.80, Take profit at 46.75

EURO50

As can be seen from the chart, the lower boundary of the upward slopping trading range which had acted as a support for the Euro Stoxx 50 index, is now playing the role of a resistance from which the market reversed lower. The Stochastics are indicating that this is a correction as the market has entered the overbought zone. With the support from the two MAs placed below the price action, the index is expected to bounce back from the support at 3016.50

Trade suggestion

Buy Limit at 3016.50, Stop loss at 2995.00, Take profit at 3062.00

https://capitalstreetfx.com/en/wp-co...ort_footer.jpg

Nasdaq 100 Slips on Rosengren’s Hawkish Comments – Short Position Favored

Nasdaq 100 dropped on Friday, denting weekly gains on the face of a strengthening U.S Dollar and retreating oil prices. The dollar climbed against most major currencies following hawkish comments from Boston Federal Reserve President Eric Rosengren that U.S short-term rates should be increased gradually now to avoid economic imbalances and a sudden spurt in rates later on, as such actions usually lead to recessions, going by historical evidence.

The benchmark inched as much as 0.32% lower, with the number of losers and gainers split almost evenly. Shares of JD.com Inc topped the list of best performing components, trading up 2.5%. On the contrary, the biggest loser is Alexion Pharmaceuticals Inc whose shares plunged nearly 4%.

Trade suggestion
Sell Stop at 4875.00, Take profit at 4865.00, Stop loss at 4885.00

Unfazed By German Data, Euro Trades Higher – Some Buying Potential Remains
The Euro shrugged off early losses after the release of mixed data from the euro zone, to extend its gains to a third consecutive trading day on Friday. Bullish bias reigned in EURUSD as investors digested the outcome of the U.S Federal Reserve meeting on Wednesday.

Euro-area Economic Growth Slides to A 20-month Low
Data from Markit reported that the euro-area economy’s growth rate slid to a 20-month low in September. The Markit monthly composite PMI remained above the 50 mark that indicates expansion, but inched down to 52.6 in September from 52.9 one month earlier. The service sector weakened to 52.1 – the lowest since December 2014. Meanwhile, manufacturing improved to 52.6 in the current month, beating expectations for a reading of 51.5.

The slowdown in the pace of growth within the EU service sector was largely due to fatigue in Germany, where the service sector delivered its worst performance since May 2013. Europe’s largest economy saw its composite PMI drop to a 16-month low at 52.7 this month, from 53.3 in August. The general number was dragged down by a decline to 50.6 in the country’s service sector.

On the contrary, France posted its strongest performance in 15 months, with the measures for both manufacturing and services improving. According to the Markit report, France’s composite PMI rose to 53.3 from 51.9 in August. In particular, the manufacturing sector index rose to 49.5 in September from 48.5 one month earlier. Likewise, the gauge for services rose to 54.1 – the best result since the start of 2015.

The Pace for Further Hikes Seems to be Decelerating
The Euro declined a little in the early European trading hours but soon regained ground as the U.S dollar has been under greater pressure. Althought a rate hike by the FED in December is quite possible, the pace for further hikes seems to be decelerating.

Looking back to last December when the Fed raised its rates for the first time in a decade, four rate hikes were forecast for the following year 2016. However, until the end of the 2016 September meeting, not even one rate hike has been undertaken by the Fed, as U.S economic growth has remained uneven.
With a labor market moving towards full capacity, Fed chair Yellen said that the case for an interest rate increase had been strengthened. However, considering subdued economic growth abroad and weakness in inflation, as well as relatively sluggish performance in the manufacturing and service sectors at home, the time required for the world’s most powerful central bank to complete its policy normalization process may be longer than initially thought.

Technical Analysis

Euro found firm support at 1.11500 which has recently helped the pair avoid falling deeper into losses. The currency pair broke above the 23.6% retracement level yesterday and continues heading upwards in the last session ahead of the weekend. The RSI index has just confirmed the uptrend by surpassing the 50 line. Nonetheless, the downward trendline connecting the lower highs over the last couple of months is within sight. The resistance offered by the downward sloping trendline may contain the upside. Thus further gains currently seem limited.

Trade suggestion
Buy Stop at 1.12145, Take profit at 1.12500, Stop loss at 1.11800

https://capitalstreetfx.com/en/wp-co...ner_report.jpg

Daily Report on September 26, 2016

Crude prices nudged up on Monday ahead of the informal meeting between OPEC members led by Saudi Arabia and non-OPEC producers such as Russia on the sidelines of the International Energy Forum in Algeria from Sept. 26-28. Algeria's energy minister Noureddine Bouterfa said on Sunday that all options were possible for an oil output cut or freeze, and “"We will not come out of the meeting empty-handed."
The dollar extended losses against the yen and euro in early Asian trading hours on Monday, as the impending first debate between U.S. presidential candidates is due later today. The market keenly awaits the first of three face-to-face contests between Democrat Hillary Clinton and Republican Donald Trump, which could determine the currency's near-term direction.
New Zealand’s Statistics Bureau reported Monday that the national trade balance widened to a deficit of NZ$1.3 billion on a yearly basis in August, compared to a NZ$730 million shortfall expected. Particularly, exports fell by $323 million to $3.4 billion in August, with dairy and meat products leading the downfall. Meanwhile, goods imports fell $148 billion to $4.7 billion, with capital goods declining $195 million.
In the UK, the latest survey of 115 financial services firms by business lobby CBI and consultancy PwC found that optimism over the outlook for Britain's financial services sector is at its lowest point since the financial crisis. Optimism fell during the three months to September, the third quarter in a row that it has dropped, marking the longest decline since the financial crisis in 2009.

Technicals
GBPUSD

Fig: GBPUSD H4 technical Chart
GBPUSD is once again heading for the support level at 1.29500 which has been holding the currency pair from breaking lower for almost one and a half month. The two MAs placed above the price action are setting a bearish tone for GBP/USD and indicating a possible break through the 1.29500 level. In the event of a continuation lower, the first notable level of support is seen at 1.29000.
Trade suggestion
Sell Stop at 1.29500, Take profit at 1.29000, Stop loss at 1.30000

USDJPY

Fig: USDJPY H4 technical Chart
USDJPY is swinging back and forth within the range between 101.200 and 100.600. The convergence of the ADX line with +DI and –DI lines indicates that no clear impending trend is being formed in the market. With the RSI staying below the average level, sellers are outweighing buyers a little, but the current level of force may not be enough for a breakout of the support at 100.600.
Trade suggestion
Buy Limit at 100.600, Take profit at 101.000, Stop loss at 100.200

AUDUSD

Fig: AUDUSD H4 technical Chart
AUDUSD has been wobbling around the 23.6% Fibonacci level at 0.76147 since last Friday but is expected to pull back from this level as prices seem to be up against solid support which is the short-term MA20. Although the RSI is heading downwards, the index has not fallen below 50, suggesting a strong bull that is still reigning in the market.
Trade suggestion
Buy Stop at 0.76250, Take profit at 0.76730, Stop loss at 0.76000

SILVER

Fig: SILVER H4 technical Chart
Silver is marching towards the 23.6% retracement level. The market is expected to break below this level easily, considering the last four breakouts. A reversal into a downtrend has been confirmed after the price action crossed over the 20-period MA near 19.623 from above. Furthermore, the RSI index which has inched below 50 has also confirmed further declines.
Trade suggestion
Sell Stop at 19.500, Take profit at 19.265, Stop loss at 19.720

WTI

Fig: WTI H4 technical Chart
WTI crude prices have resumed the downtrend after a period of corrective buying. WTI fell nearly 5% in the last session from two-week highs around 46.50 to as low as 44.20, and broke below both MA20 and MA50, consolidating the downward momentum. Sellers are anticipated to send the market lower. As can be seen from the RSI chart, the index remains under the 50 level
Trade suggestion
Sell Stop at 44.50, Take profit at 43.85, Stop loss at 45.10

FTSE

Fig: FTSE H4 technical Chart
FTSE has been on a decline from over one-month highs at 6937.90. Even though the two moving averages are placed below the price action, the index is likely to keep falling as downward pressure is being exerted from parabolic sar band placed above the price action. The %K line is taking the lead ahead of the %D line in the race towards the oversold zone.
Trade suggestion
Sell Stop at 6880.00, Take profit at 6815.00, Stop loss at 6920.50
https://capitalstreetfx.com/en/wp-co...ort_footer.jpg

A Week Of Little Economic Data Ahead – Focus Shifts To U.S Presidential Debate, Algiers Meeting Between Oil Producers

Global stocks trimmed weekly gains on Friday, weighed by lower oil prices and the bounce back in the U.S dollar. The Dow Jones ended down 0.71 percent, at 18,261.45, the S&P 500 lost 0.57 percent, to 2,164.69 and the Nasdaq Composite dropped 0.63 percent, to 5,305.75. Still, major indexes posted gains for the week, with the S&P 500 recording its best weekly performance in more than two months.

Stocks took off on Wednesday after the U.S. Federal Reserve decided to leave the low-interest-rate environment intact by keeping rates unchanged, which helped fuel the bull market. The U.S dollar that typically moves in an opposite direction with equity markets, lost ground against most of its peers, as investors forecast that the Fed would not increase its Fed funds rate until December.

Fed Chair Janet Yellen will testify before the House Financial Services Committee on regulation and supervision on Wednesday, and is due to speak via video conference at the Minority Bankers Forum in Kansas City on Thursday. Her comments will be watched closely for any new hints on policy, following repeated speeches saying that the case for a rate hike has strengthened given a steady labor market.

The euro finished the week higher but the pair has been confined between a 1.1120 to 1.13500 range since mid-August. While manufacturing activity in Germany and the Eurozone as a whole accelerated, the service sector stagnated, thus depressing the composite index lower. European Central Bank President Mario Draghi is due to testify before the European Parliament’s Committee on Economic and Monetary Affairs in Brussels on Monday, and is scheduled to speak about current developments in the euro area at the German Bundestag, in Berlin on Wednesday.

There were no major U.K. economic reports released in the past week, but the British Pound was still among a handful of currencies that traded lower against the greenback. The answer to the question of whether the U.K government will trigger Article 50 and start a period of negotiations with the EU regarding Britain leaving the EU, still lingers in the minds of investors. Last Friday, U.K foreign secretary Boris Johnson said that his government should act as soon as possible and the deal should be sealed before a new round of elections to the European Parliament in May 2019. The calendar remains light next week for the GBP with only revised second quarter GDP numbers due on Friday.

The best performing commodity currency last week was the Australian Dollar. The Aussie was given a boost from the RBA minutes which said that the central bank did not see any serious need to ease in the near future. The Reserve Bank of Australia noted that it sees current monetary policy as being accommodative enough to meet its inflation goals. In the coming week, no major Australian economic data will be reported.

On the other hand, the New Zealand dollar was hit hard by the RBNZ’s dovish monetary bias. The RBNZ made it very clear that “further policy easing will be required” to ensure inflation moves towards the target because the local currency is still too strong. Similar to the AUD, there are no important data releases for the NZD barring trade numbers scheduled for release at the beginning of the coming week.

The Canadian dollar traded strongly for most of last week, largely thanks to the sell-off in the U.S. dollar and a rise in oil prices. However, the Loonie collapsed on Friday, halting a four-day rally, following a slate of unsatisfying economic data.

Canada’s core inflation rate in August grew at the slowest pace in two years. Consumer prices excluding volatile items such as food and energy, slowed to 1.8 percent from July’s 2.1 percent on a yearly basis, Statistics Canada said. Compared to the same period last year, the overall inflation rate decelerated to 1.1 percent, from 1.3 percent one month earlier. On a month-on-month basis, both economic indicators made no progress.

Not only did inflation readings lag behind forecasts, Canada’s retail sales were reported to fall 0.1 percent in July, versus an estimate calling for a 0.1 percent increase. Core retail sales which strip out automobiles dropped 0.1% in the same period as well.

Continuing the light week ahead, no data for the CAD will be published until Friday, when Canadian GDP numbers are scheduled for release.

Despite an unexpected drop in the weekly crude oil inventory data reported by the U.S. government, crude oil remained vulnerable to any headlines related to the informal talks between major producers next week in Algeria from Monday through Wednesday. 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.

Chances of an output freeze deal being reached appeared minimal after Saudi Arabia and its rival Iran failed to reach any consensus after a two-day meeting last week. Furthermore, according market sources, OPEC’s biggest oil producer did not see September as the right time for any significant move. Instead, the freeze talks could be postponed to the official OPEC meeting in Vienna on November 30.

Late on Monday night(early Tuesday in Asia), the markets will turn their attention to the first televised U.S. presidential debate between Democrat nominee Hillary Clinton and Republican Donald Trump. Recent polls have shown a tightening race, with Election Day is only six weeks away.

EUR/AUD signal by Capital Street FX

From GMT 08:00 26/09/2016
Till GMT 21:00 26/09/2016

Buy at 1.47600
Take profit at 1.48300
Stop loss at 1.46800

Twitter Sellers Trending – Shares Downgraded to Under Perform, Buyout Talks In The Air

After soaring more than 20% in the year to date, shares of Twitter Inc. seem to be suffering from a perception of being overvalued compared to other social media platforms. Twitter stocks traded around $22 on Friday amidst rumors of a buyout, which have kept re-surfacing for months.

But according to market analysts, given weaknesses in the company, such as slowing user growth and engagement, and weak advertising technology, the price target for Twitter’s shares is being projected around $17. Twitter shares have consequently sunk more than 3% on Monday.

Snapchat and Pinterest are emerging as strong competitors, and have already outpaced Twitter in terms of engagement and advertising investment. Data indicates that the average time users spent on Snapchat in August is almost twice as much as that on Twitter.

Trade suggestion
Sell Stop at 21.95, Take profit at 21.65, Stop loss at 22.20

Will Clinton Victory Ignite A Multi Year Bull Run In Natural Gas?

Natural gas rose for the first time in the last four trading sessions, on Monday. After drifting lower in the second half of last week due to both fundamental and technical pressure, natural gas bounced back today as hedge funds increased bullish wagers on the commodity.

Natural Gas Demand-Supply Outlook

Natural gas pulled back from 16-month highs at $3.097 on Wednesday, and was driven lower on Thursday after the U.S. EIA reported larger-than-expected stocks for the week ended Sept. 16. Data showed that supplies rose 52 bcf in the reported week, topping the average rise of 51 bcf expected by analysts. Total stocks surged to 3.551 trillion cubic feet, up 140 bcf from a year ago and 268 bcf above the five-year average.

U.S. Commodity Futures Trading Commission data released on Friday indicated money managers increased their net-long positions in natural gas futures and options for a second week to the highest level since 2014. NG futures have staged a dramatic recovery after a warmer than usual winter led to low consumption and left behind record inventories earlier this year, sending prices to multi-decade lows in March. Scorching summer and unusually warm weather for this time of year has boosted air-conditioner use this year.

As a result, gas demand from electricity generators has been pushed to a record, helping erode an inventory surplus that was weighing on prices. Drillers cut costs and capped production from shale due to low oil prices. Thus, stockpiles may fall below normal levels before the winter. In the event of a cold winter, the NG market may be left with a deficit and could be vulnerable to price spikes.

Gas used by power plants has risen 55% since 2006 not just due to a boom in production from U.S. shale fields that increased supply and drove down prices. Furthermore, governments are gradually replacing coal with gas as it produces less carbon dioxide than coal when burned.

Japan’s demand for liquefied natural gas (LNG) is expected to increase regardless of the nuclear re-start program. Japan is the world’s largest LNG importer at about 35% of global demand. Nonetheless, this country is still overly reliant on oil and coal when it comes to energy use. Japan is being criticized for using a significantly higher ratio of oil and coal in generating power than other developed countries. As a result, Japanese government to encourage natural gas consumption instead of oil and coal to reduce CO2 emissions.

U.S. Presidential Debate

Natural gas investors are waiting for the debate between U.S. presidential candidates that is scheduled for later today. Given different economic policies of the two candidates, U.S gas demand will be influenced. According to Bloomberg Intelligence estimates, gas use for power generation in 2030 will fall by 11% compared to the level of 2015, if Republican Donald Trump is elected.

Trump is among those supporting to eliminate clean air rules proposed by President Barack Obama. Obama’s Clean Power Plan targets to wean the U.S. off coal used by power plants to reduce emissions by 32 percent by 2030.

On the contrary, the volume of natural gas burned by America’s power plants may rise by 5.8 percent should Democrat Hillary Clinton, who has pledged to enforce the Obama plan, becomes the first female president of the U.S.

Technical Analysis
Natural gas has witnessed a strong rise since March 2016 which has doubled and pushed the commodity price above 3.000 for the first time since May 2015. The price retreated after the market hit the overbought threshold but is expected to extend the advance as both the short-term DMA20 and the long-term DMA50 are moving below the price action, fueling bullish momentum in the market.

Trade suggestion
Buy Stop at 2.985, Take profit at 3.020, Stop loss at 2.930

FTSE signal

From GMT 07:30 27/09/2016
Till GMT 21:00 27/09/2016

Buy at 6865.00
Take profit at 6920.00
Stop loss at 6835.00

https://capitalstreetfx.com/en/wp-co...ner_report.jpg

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.

Technicals

USDCHF

Fig: USDCHF H4 Technical Chart

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.

Trade suggestion

Sell Stop at 0.96800, Stop loss at 0.97100, Take profit at 0.96514

NZDUSD

Fig: NZDUSD H4 Technical Chart

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.

Trade suggestion

Sell Stop at 0.73200, Stop loss at 0.72900, Take profit at 0.73630

USDJPY

Fig: USDJPY H4 Technical Chart

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.

Trade suggestion

Sell Stop at 100.500, Stop loss at 101.000, Take profit at 100.000

GOLD

Fig: GOLD H4 Technical Chart

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.

Trade suggestion

Buy Stop at 1337.50, Stop loss at 1333.00, Take profit at 1342.00

BRENT

Fig: BRENT H4 Technical Chart

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.

Trade suggestion

Buy Limit at 46.74, Stop loss at 46.30, Take profit at 47.60

Dow Jones

Fig: DOW JONES H4 Technical Chart

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.

Trade suggestion

Buy Limit at 18086.60, Stop loss at 17990.00, Take profit at 18330.00

https://capitalstreetfx.com/en/wp-co...ort_footer.jpg

Silver Loses Ground Following Clinton Victory and Collapsing Oil – Short Positions Suggested

Silver dropped for a third day in a row on Tuesday, hitting the lowest in more than a week at around $18.960 per ounce. The decline was due to a firmer dollar, weakening oil prices and the outcome of the first presidential debate that sent investors towards riskier assets, after a Clinton victory that relieved some of the market’s fears.

Democrat Clinton was judged by financial markets to win the late night Monday contest, which helped put downside pressure on safe-haven assets including silver. Further downside pressure was created by a falling crude price that has been sliding since the last 24 hours, dampening the appeal of commodities in general including gold and silver – which are considered a shield for investor wealth against inflation.

Trade suggestion
Sell Stop at 19.000, Stop loss at 19.300, Take profit at 18.765

Mexican Peso Rises From All Time Lows Following Trump Defeat – But Can The Rally Sustain The Momentum?

The Mexican Peso rose nearly 2% on Tuesday after Democrat nominee Hillary Clinton outperformed her rival Donald Trump in the first of three presidential debates. Recently, the peso has been moving in inverse proportion to the probability of a Donald Trump victory, as the Republican candidate is perceived to be a significant threat to Mexico’s economy.

The peso plunged to a record low of about 19.90 against the U.S dollar last week and had hovered near an all-time low around the 20.00 threshold for a couple of day ahead of the widely expected debate, as polls indicated support was growing for Trump. Trump has pledged to renegotiate the two-decade-old North American Free Trade Agreement. This could spell trouble for the Mexican economy as the United States is Mexico’s biggest single export market.
If Trump is elected, and the NAFTA agreement is terminated, some Mexican goods will be slapped with a 35% tariff, such as Ford cars that are made in Mexico and sold in the United States

Furthermore, the Republican nominee blamed immigrants from Mexico for causing a number of U.S’ evils such as violent crime, drugs and the loss of jobs. Trump launched his campaign last year, promising to step up immigration controls and even vowing to build a wall along the US – Mexico border.
Until the Election Day on November 8, there are two more debates and the peso is foreseen to keep fluctuating with each event.

However, in general, Trump is not the only reason triggering the downfall of the Mexican peso versus the greenback. Depressed oil prices, declining foreign investment, and stagnating wages for low-income workers are among structural problems that Mexico’s government is facing. Mexico’s economy was reported to have contracted for the first time in three years in the second quarter of this year. Thus, it is hard for the peso to hold on to today’s gains, purely based on a Clinton victory.
USDMXN rebounded from the 23.6% Fibonacci retracement level at 19.44059 after falling steeply from all-time highs at 19.91962. The sharp decline has brought the market into bearish territory and pushed the price action to move past the two moving averages. But the downside seems short-lived as the price has crossed back above the long term MA50 from below. With the RSI Index nearing the oversold territory, the market could ounce back and resume its rise to test the recent highs.


Trade suggestion
Buy Stop at 19.60000, Stop loss at 19.44000, Take profit at 19.74000