Daily Technical Analysis by Capital Street FX

Alcoa Earnings Fall Short of Estimates – Shorts Favored On Weak Results And Company Break Up

Shares of Alcoa Inc. dropped more than 10% on Tuesday after the metals manufacturer disappointed markets by reporting a worse-than-anticipated quarterly earnings result.

Kicking off the third-quarter earnings season, Alcoa reported net profit of $166 million, or 33 cents per share. Profits were up from $44 million, or 6 cents per share in the same period one year ago, but missed expectations calling for earnings per share of 35 cents.

Alcoa’s revenue fell to $5.21 billion from $5.57 billion in the same quarter a year ago, as a result of lower production in its traditional smelting operation. The advance in profits at the New York-based company resulted from cost-cutting measures and lower income tax provisions.

This is Alcoa’s last quarterly report before it splits into two separate entities – one focussing on the traditional smelting business, and the other on higher-end aluminum and titanium alloys.

Alcoa Trade suggestion
Sell Stop at 28.25, Take profit at 26.00, Stop loss at 30.00

Start Trading Forex, Indices, Commodities And Hundreds of Other Markets With Capital Street FX Now!

FTSE100 to Set a New Record – Buying Looks Attractive As Pound Continues To Weaken

U.K stocks swing between gains and losses on Tuesday morning as multinationals continued to benefit from a continuing slide in the pound, but energy companies were weighed down by lower oil prices.

The British Pound extended its slide versus the U.S dollar for the fourth consecutive trading day amidst concerns over the potentially tough negotiation between the U.K and the European Union regarding the UK’s exit from the single market. According to Treasury documents, which were leaked to The Times, Britain will lose up to £66 billion a year if it goes for a hard Brexit.

The cost of leaving the single market and the EU customs union, and to switch to World Trade Organization (WTO) rules will be between £38bn and £66bn per year after 15 years, the documents said. The country’s GDP is also forecast to fall by as much as 9.5% compared to the GDP numbers the UK economy would register, were it to remain in the EU. This projection is based on the scenario where Britain leaves the EU without a successor arrangement.
GBPUSD broke through the $1.23000 threshold today and has played a critical role in cheering most of the FTSE 100’s constituents as these companies generate the bulk of their revenues overseas.

Among top movers, fashion brand Burberry Group PLC added 2.10%, reveling in the positive sentiment towards European luxury brands, after French luxury giant LVMH reported that its nine-month revenue rose by 4% compared with the same period last year.

Other retailers including Travis Perkins PLC and Next PLC also witnessed a rise. Shares of Travis Perkins PLC – the builders’ merchant and home improvement company – gained 2.24% after its “outperform” rating was maintained by Credit Suisse Group AG and JPMorgan Chase & Co. Meanwhile, Leicester-based apparel and accessories seller Next PLC topped the market – jumping 3.64%.

Hospitality and hotel group Whitbread PLC added to the upside, rising 2.73%.

On the downside, Informa PLC led the list of worst performers. Shares of the publishing and events company dropped around 8% due to the dilution effect of the admission of nil-paid rights on the stock. The rights were tendered due to the acquisition of U.S based Penton Information Services.

With a decrease of 3.34%, insurance, and banking group Old Mutual Wealth became the runner-up on the list of losers. Old Mutual Wealth reported net client cash flows fall in the third quarter by 0.9 billion pounds ($1.12 billion). Cash flow fell from 2.3 billion pounds a year earlier, due to pension reforms that prompted clients to withdraw cash.

Energy stocks drifted lower as oil ticked down after the International Energy Agency, in its monthly report, said that OPEC’s total crude production rose by 160,000 barrels per day (bpd) to a record 33.64 million bpd in September. This implies that OPEC needs to slash its current output by between 640,000 and 1.14 m bpd, to reach the ceiling range agreed by the cartel in Algiers which is from 32.5 million to 33 million bpd.
Oil major BP PLC inched 0.18% lower while Royal Dutch Shell pared earlier gains as oil prices headed lower.

FTSE 100 Technical Analysis

FTSE 100 retested the record high logged last week at 7126.95. The steady rally, which has continued since June 27th, has pushed the market into the overbought zone, as indicated by the RSI chart. The bullish momentum seems to be maintaining its strength with a large divergence between +DI and –DI line created in the ADX indicator window. The Index is expected to attempt creation of new all-time highs.

Trade suggestion
Buy Stop at 7130.00, Take profit at 7150.00, Stop loss at 7110.00

Start Trading Forex, Indices, Commodities And Hundreds of Other Markets With Capital Street FX Now!

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

Daily Report on October 12, 2016

Asian shares declined for a fourth day after a Wall Street’s sell-off on Tuesday. Not only did a stronger dollar weigh on multinational companies, but a gloomy start of the earnings session knocked down investor confidence in stock markets. The Dow Jones fell 1.09%, to 18,128.66, the S&P 500 lost 1.24%, to 2,136.73 and the Nasdaq Composite dropped 1.54%, to 5,246.79, led by 11.4% decline in Alcoa’s shares.

Lower oil prices were also one of factors dragging down equity markets yesterday. Crude oil finished lower on Tuesday amidst concerns that Russia will not be fully committed to an OPEC deal to curb oil output, even after Russian President Putin had pledged to join the cartel to re-stabilize the oil market.

Topping up to comments by Russia’s Energy Minister Alexander Novak that his country is currently only considering output freeze option, not production cut, Igor Sechin - the Executive Chairman of oil giant Rosneft - said his company will not trim or freeze output as part of a possible agreement with OPEC.

All major Asian benchmarks ticked lower today. The MSCI Asia Pacific Index dropped 0.4%. Hong Kong’s Hang Seng Index and the Shanghai Composite Index declined 1.1% and 0.3%, respectively. The British Pound bounced back 1.5% against the greenback on the news reported by Bloomberg that Prime Minister Theresa May had accepted the participation of Parliament in the decision on when to trigger the two-year period of negotiation with the EU regarding the departure of the U.K.

Britain’s Parliament will debate on Wednesday to gain the right to “properly scrutinize” the government’s plan for leaving the EU before PM May begins formal talks. If it wins, the triggering of Article 50 of the Lisbon Treaty, which starts the exit process, may be delayed compared to May’s initial plan as most parliamentarians are in favor of remaining within the EU.

Technicals

USDJPY

Fig: USDJPY H4 Technical Chart

As can be observed from the chart, the pair USDJPY has resumed its uptrend after crawling back from near 104.100 handle. Recent candles have long lower shadows and nearly no upper shadows, which suggested that the pair may have bottomed out. Bulls which are still dominating the market, have stepped in to support the pair from lows. The fact that %K line has crossed over the %D line from below has consolidated upbeat moves.

Trade suggestion

Buy Stop at 103.650, Take profit at 104.100, Stop loss at 103.300.

AUDUSD

Fig: AUDUSD H4 Technical Chart

The Aussie pulled back from near 38.2% retracement but the upside seem limited as the pair is struggling with two MAs lingering above the price action. Lower lows since the end of September and consistent reversals upon coming up against the moving averages have indicated strengthening bears. RSI is close to the 50 line and is likely to pull back like it did on Monday. The support at 38.2% level is within sight.

Trade suggestion

Sell Stop at 0.75750, Take profit at 0.75300, Stop loss at 0.76100

GBPNZD

Fig: GBPNZD H4 Technical Chart

GBPNZD has been under heavy downward pressure exerted by the two MAs placed above the price action. The short-term MA20 that forced the pair to reverse lower yesterday, continued to push the pair lower today. With the RSI remaining in bearish territory and pointing towards the oversold zone, GBPNZD is expected to test the low at 1.71400 again.

Trade suggestion

Sell Stop at 1.73050, Take profit at 1.71400, Stop loss at 1.74000

BRENT

Fig: BRENT H4 Technical Chart

Brent crude extended its rally after the price fell from one-year highs at around 53.72. Thanks to the dynamic support from the MA20, the market pulled back again and is heading upwards to re-attempt the resistance at 53.36 which is the 61.8% Fibonacci level where it had to give up its strength and reverse lower. Along with the stochastic chart that has shown the convergence of the %K line and %D line, the ADX chart where ADX index surged above 20 are factors consolidating the uptrend.

Trade suggestion

Buy Stop at 52.70, Take profit at 53.35, Stop loss at 52.00

Natural Gas

Fig: Natural Gas H4 Technical Chart

Having soared above the 38.2% retracement at 3.187 to as high as 3.300, Natural gas trimmed its rally as the one way move may have exhausted bulls for now. Too many buyers created an overblown market vulnerable to reversals, as everyone who wanted to buy may have already bought. Sellers, therefore, jumped in and pushed the price back down. But as can be seen from the chart, all of the recent candles have closed at the same/similar levels, which suggested that bears could not dampen the price lower. Hence, this may be a possibility for a reversal back into an uptrend.

Trade suggestion

Buy Stop at 3.230, Take profit at 3.300, Stop loss at 3.200

EURO50

Fig: Euro Stoxx 50 H4 Technical Chart

Euro Stoxx 50 has generally been following an uptrend supported by a couple of moving averages hovering below the price action. The index has reversed consistently after hitting highs, but we can observe higher highs and higher lows, which suggests that buyers are the overwhelming force currently. As the RSI index has bounced back from the dividing line between bullish and bearish territory, Euro Stoxx 50 may re-attempt the high at 3061.00 logged on September 22nd.

Trade suggestion

Buy Stop at 3030.00, Take profit at 3061.00, Stop loss at 3010.00

CAD/JPY signal by Capital Street FX

From GMT 07:25 12/10/2016
Till GMT 21:00 12/10/2016

Buy at 78.360
Take profit at 78.860
Stop loss at 78.000

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

Daily Report on October 13, 2016

Asian shares slumped for the fifth trading session in a row, stumbling to three-week lows after an unexpected decline in Chinese exports raised fresh concerns about the health of the world’s second biggest economy. MSCI's broadest index of Asia-Pacific shares outside Japan dropped 1% to the lowest since mid-September. Other Asian stock indices such as Hong Kong’s Hang Seng index, and the Japanese Nikkei 225 also fell today.

According to the General Administration Customs - China, the country’s exports diminished by 10% in September from a year earlier while imports also witnessed a decline of 1.9% after a pickup in August. Worse-than-expected data left China with a trade surplus of $41.99 billion for the month – a level that missed the forecast for a surplus of $53.1 billion.

Minutes of the U.S. central bank’s September meeting, released on Wednesday reinforced the case for tighter monetary policy before the end of the year.

Against the background of weak Chinese reports suggesting tepid domestic and foreign demand, increasing expectations of a U.S. interest-rate hike and uncertainties spurred by Britain’s efforts to leave the European Union, the Japanese Yen has been rising in a knee-jerk reaction. A fall in equities gave a lift to the yen – one of the safe haven currencies which investors seek in times of market stress.

Oil extended losses following the report by the American Petroleum Institute that U.S. crude inventories rose by 2.7 million barrels to 470.9 million barrels in the week to Oct. 7. This would be the first rise in oil stocks following five straight weeks of declines. The U.S. Energy Information Administration (EIA) is due to publish official inventory data later on Thursday.

Technical

AUDUSD

Fig: AUDUSD H4 Technical chart

The Aussie is following a steady downtrend that has pushed AUDUSD to break below the 38.2% retracement level at 0.75255. The currency pair pulled back yesterday after encountering the resistance zone between two moving averages. These two MAs are expected to cast downward pressure on the pair for the near future and may send AUDUSD to as low as the 50.0% level.

Trade suggestion

Sell Stop at 0.75000, Take profit at 0.74550, Stop loss at 0.75300

NZDUSD

Fig: NZDUSD D4 Technical chart

NZDUSD dropped below the 38.2% level on Monday and continues to head southwards through this week. After some correction yesterday, the Kiwi resumed the down moves today and is anticipated to find support at around 0.69600. The RSI index has neared the oversold zone and the ADX has soared as high as 51.83. Therefore after hitting this level, a pullback could come about.

Trade suggestion

Sell Stop at 0.70400, Take profit at 0.69600, Stop loss at 0.71000.

EURJPY

Fig: EURJPY H4 Technical chart

As can be seen from the chart, EURJPY has re-entered the trading range between a lower boundary at 114.000 and the upper boundary at 116.000, where it had been trapped from late-August to mid-September. The pair is heading towards the support at 114.000 and may break through this level as the bearish signals are quite strong. The two MAs are very likely to converge and are placed above the price action, the RSI index is pointing downwards, and there is wide divergence between the %K line and the %D line in the stochastic charts. All of this combines to suggest a powerful downtrend.

Trade suggestion

Sell Stop at 113.900, Take profit at 113.000, Stop loss at 114.500

GOLD

Fig: GOLD H1 Technical chart

As can be observed from the hourly chart, the gold market has received a signal suggesting a reversal into an up-move as the 20-period MA has penetrated the 50-period MA from below. With the RSI indicator surging above the 50 line yesterday and heading upwards to the overbought zone, the yellow metal can soar as high as 1265.00.

Trade suggestion

Buy Stop at 1260.00, Take profit at 1265.00, Stop loss at 1253.00

Sugar

Fig: Sugar H1 Technical chart

Sugar had to give up its strength after coming up against a couple of moving averages which are placed above the price action. The sugar market has been floating in bearish territory, as indicated by the RSI index that has inched down to as low as 44.36. The support at 22.50 can be where we take profit.

Trade suggestion

Sell Stop at 22.90, Take profit at 22.50, Stop loss at 23.20

NASDAQ 100

Fig: NASDAQ 100 H4 Technical chart

The NASDAQ 100 index created a gap down at the market open on Wednesday. The index has fallen back into the trading range between 4840.00 and 4750.00 and might pay a visit to the lower boundary at 4750.00 as the short-term MA20 has crossed over the long-term MA50 from above, indicating bears overshadowing the market.

Trade suggestion

Sell Stop at 4780.00, Take profit at 4750.00, Stop loss at 4800.00

EUR/GBP signal by Capital Street FX

From GMT 07:30 13/10/2016
Till GMT 21:00 13/10/2016

Buy at 0.90500
Take profit at 0.91300
Stop loss at 0.90000

Cost Cutting Helps CSX Third-Quarter Results beat Expectations – Sells Suggested

Shares of CSX Corporation rose more than 3% in after hours trading on Wednesday after the transportation services company reported better-than-expected quarterly earnings after the closing bell.

CSX’s third-quarter earnings fell to $455 million, or 48 cents a share, from $507 million, or 52 cents a share, a year earlier. Net profit for the railroad operator was hurt by the drop in revenue and freight volumes. During the three-month period through September, CSX’s revenue shrank 8% to $2.71 billion compared to the same quarter one year ago. Still, the results came in above market expectations of 45 cents EPS, on revenue of $2.69 billion.

The U.S’s third largest railroad transportation company observed a total decline of 8% in shipping volume across most of its goods categories including metals, equipment business and coal. Among decliners, coal shipments posted the worst performance, slipping 21% as a result of oversupply in the world market and a stronger U.S. dollar that made U.S. exports more expensive overseas.

Additionally, plunging fuel prices and increasing use of natural gas that is being encouraged by the government are putting pressure on coal demand and coal shipments. As natural gas produces less carbon dioxide than coal when burned, the U.S government has planned to get off coal used by power plants, to reduce emissions.

However, the Florida-based company’s third quarter’s data still bettered forecasts thanks to strong cost performance and productivity measures. The bottom line was helped by 6.8% cut in expenses, driven by $112 million of efficiency gains and $53 million of volume-related cost reductions.


Shares of CSX Corp have been on a decline after reaching 15-month highs at around 31.28. In general, the shares are trading above the 20-day and 50-day MAs and the market is still in favor of buyers, as indicated by the RSI chart. Share prices are expected to reverse today, partly due to fundamental factors, but also because the price action has neared the short-term DMA20.

CSX Trade suggestion
Sell Stop at 31.00, Take profit at 30.50, Stop loss at 30.00

Start Trading Forex, Indices, Commodities And Hundreds of Other Markets With Capital Street FX Now!

Natural Gas Screams to Record Highs On Smaller-than-expected Rise in U.S. Stocks– Buy Call Options

Natural gas prices turned sharply higher Thursday following a two-day slide. The commodity hit the highest since December 2014 at $3.347 per million British thermal units after the U.S. Energy Information Administration reported that natural gas supplies rose 79 billion cubic feet for the week ending Oct.7th.
The increase in stocks was below analyst estimates that had called for a rise of 87 billion cubic feet.

According to the report, total stocks now stand at 3.759 trillion cubic feet, up 56 billion cubic feet from a year ago and 192 billion cubic feet above the five-year average.

Trade suggestion
Buy Stop at 3.350, Take profit at 3.380, Stop loss at 3.320

Start Trading Forex, Indices, Commodities And Hundreds of Other Markets With Capital Street FX Now!

NZD/USD signal by Capital Street FX

From GMT 07:05 14/10/2016
Till GMT 21:00 14/10/2016

Sell at 0.70900
Take profit at 0.70400
Stop loss at 0.71300

Copper Plunges As Demand Falls, Risk Of Supply Glut Rises – Short Positions Encouraged

Copper has been slumped for the most part of the week, collapsing nearly 4% after reaching intra-week high at $2.2018 per pound on Monday. The commodity market is forecast to witness more decline as it is going to confront with significant supply glut and dropping demand in the coming months.
Copper witnessed the biggest one-day loss on Thursday since June 07th, after the Chinese General Administration Customs reported worse-than-expected exports and imports data for September. According to the report, China’ exports diminished by 10% in September from a year earlier while imports also witnessed a decline of 1.9%, which spurred concerns over weak demand for goods both in China and many other parts of the world such as the U.S., Europe and much of Asia.

Demand for copper imports of China was also reported to decelerate last month to the lowest in more than a year. China’s imports of the red medal fell by 26 percent from a year ago to 340,000 tons in September, which is the lowest since at least August 2015. On a monthly basis, imports to the world’s leading copper consumer dropped by 2.9%.

On the supply side, commodity analysts at Goldman Sachs said that considering the rise of supply, copper prices would be under downward pressure over the next three to six months.

In a separate report by BMI Research, the research firm forecast Iran’s mining industry will resurge after years of Western sanctions. According to BMI, foreign investment will help accelerate Iran’s mining sector as the Middle-Eastern nation possesses vast underdeveloped reserves but is still looking for modernization and new technology.

Iran’s copper output is expected to outperform in the coming years and reach the growth rate of 13% each year top 500,000 tons by the end of the decade.

In a week, copper has breached through two important Fibonacci levels - the 38.2% and 50.0% , to fall as low as 2.1120. The price action also has also crossed below both the long-term DMA50 and short-term DMA20 from above. The market is under pressure from two MAs placed overhead, and the overwhelming strength of sellers in the market. Copper prices are approaching the 61.8% handle at 2.0860. The RSI is also heading towards bearish territory, providing further confirmation for the down-move.


Trade suggestion
Sell Stop at 2.1120, Take profit at 2.0860, Stop loss at 2.1400

Start Trading Forex, Indices, Commodities And Hundreds of Other Markets With Capital Street FX Now!

Daily Report on October 14, 2016

Asian stocks bounced back on Friday, but were still heading for the biggest weekly decline in almost a month. Shares erased some losses from the start of this week, thanks to the rally in oil prices that boosted energy sector stocks, and stronger-than-expected Chinese inflation data which helped ease concerns about the health of world's second-biggest economy.

After triggering chaos in global stock markets by reporting a steep drop in exports and imports in data released yesterday, China once again set the tone for the markets, but in the opposite direction. Chinese producer prices unexpectedly rose in September for the first time in nearly five years, thanks to stronger commodity prices.

Meanwhile, China’s consumer inflation also beat expectations, accelerating more than expected to 1.9 percent in September compared to the same month last year. The price rise was mainly due to higher food prices. On a yearly basis, Chinese food prices added 3.2 percent in September, topping a 1.3 percent gain (year-on-year) in August.

Oil turned higher even though the U.S. Energy Information Administration on Thursday reported that U.S. crude stocks rose for the first time in six weeks. Crude stockpiles in the U.S swelled by 4.9 million barrels in the week to Oct. 7th .Total inventories rose to 474 million barrels, but distillates, which include diesel and heating oil, dropped by 3.7 million barrels and gasoline fell by 1.9 million barrels.

Also in the U.S, filings for unemployment benefits were reported to be at a four-decade low over the past two weeks. According to the weekly report by the U.S Department of Labor, jobless claims were 246,000 in the week ended October 8th, remaining below 300,000 for 84 straight weeks and indicating a healthy labor market.

Technicals
EURCHF

Fig: EURCHF H4 Technical chart
EURCHF pulled back from two-week lows at 1.08687 on Thursday but failed to surpass the 50.0% retracement level at 1.09093. The currency pair crawled back to the downside as it is still under the downward pressure of the two moving averages placed above the price action. Down moves are being supported by indicators. As can be observed from indicator windows, while stochastic lines are pointing downwards, the RSI index has also retreated to as low as 38.42.
Trade suggestion
Sell Stop at 1.08900, take profit at 1.08520, stop loss at 1.09100

EURUSD

Fig: EURUSD H4 Technical chart
EURUSD broke out of the recent trading range on Tuesday and fell below the 50.0% retracement at 1.10573 on the same day. The pair plummeted to as low as 1.09847 yesterday, before buyers stepped in and liberated it from the oversold zone. However, a brief correction was not enough to support the pair back above the 50.0% level again. In the event of a continual downtrend, the pair may find support at the 61.8% handle.
Trade suggestion
Sell Stop at 1.10200, take profit at 1.09800, stop loss at 1.10600

AUDUSD

Fig: AUDUSD H4 Technical chart
We have seen a strong rally in the Aussie that lifted the market from the 38.2 level to near the 23.6% level. Nonetheless, those rapid up moves also sent AUDUSD into the overbought territory and prompted bears to jump in and push the pair down back below the long-term MA50. The %K line has reversed lower to penetrate the %D line from north to south, but we may need to wait for a confirmation from the RSI index which has reached but not surpassed the 50 line yet.
Trade suggestion
Sell Stop at 0.75650, take profit at 0.75250, stop loss at 0.76000

SILVER

Fig: SILVER H4 Technical chart
Silver has been trading sideways to lower above the 50.0% Fibonacci level since the start of this week. The metal has consistently been pressurized by the short-term MA20 placed above the price action. However, bears have failed to make a breakout below the 50.0% retracement level at 17.416. With U.S data coming out later today, the silver market is anticipated to escape out of the thin trading range it has been in recently. Better-than-expected numbers may push silver to retest last-week's lows at 17.090
Trade suggestion
Sell Stop at 17.390, take profit at 17.090, stop loss at 17.500

WTI

Fig: WTI H4 Technical chart
U.S crude prices have still remained within an overall uptrend, after having suffered losses earlier this week. Having bounced back from the lower band of the Bollinger range, the price action has moved towards the middle band and has just crossed over the middle band (which is also the 20-period MA20). WTI is expected to keep moving upwards since the market continues to enjoy bullish momentum, as indicated by the RSI chart. The upside may be contained by the 0.0% level which is very close to the upper band of the Bollinger range.
Trade suggestion
Buy Stop at 50.85, take profit at 51.55, stop loss at 50.30

FTSE 100

Fig: FTSE 100 H4 Technical chart
U.K’s FTSE 100 index surged above 7000.00 again following a drop below this level yesterday. The index extended Thursday’s gains and looks set to trade above the short-term MA20 after crossing over the long-term MA 50 from below, on Thursday. As can be observed from the stochastic chart, the %K line is moving far ahead of the %D line, suggesting further upside moves.
Trade suggestion
Buy Stop at 7020.00, take profit at 7075.00, stop loss at 6975.00


Start Trading Forex, Indices, Commodities And Hundreds of Other Markets With Capital Street FX Now!

JP Morgan Chase Kickstarts Banking Earnings Season With Upbeat Data

Shares of JP Morgan Chase & Co rose to as high as $69.03 per share after the largest U.S bank by assets reported third-quarter results that beat market’s estimates.

JP Morgan announced a profit of $6.29 billion, or $1.58 a share for three-month period through September. Last quarter profit fell 7.6% compared to that in the same period of 2015 as the bank continues to operate in a low-interest-rate environment. However, the readings still crushed expectations of earnings of $1.39 a share.

The bank’s revenue registered at $25.51 billion, also topping analysts’ forecast of $24 billion.
JPMorgan was the first big U.S. bank to report third-quarter earnings and its better-than-expected performance gave Wall Street certain confidence.

Trade suggestion
Buy Stop at 68.10, take profit at 68.50, stop loss at 67.70

Start Trading Forex, Indices, Commodities And Hundreds of Other Markets With Capital Street FX Now!

Central Bank Meetings Back In Focus, Busy Week for British Pound

U.S stocks were almost unchanged on Friday after paring earlier gains in the second half of the session. At the close, the Dow Jones Industrial Average rose 0.22%, while the SP 500 index and the NASDAQ Composite index finished just above break-even.

Financials led advancers as JPMorgan Chase, Wells Fargo and Citigroup, all reported third-quarter earnings data before the opening bell, and posted better-than-expected quarterly results. Stock investors were taken for a choppy ride this week, with sentiment largely driven by Chinese economic data, U.S earnings reports, and comments from the U.S Federal Reserve about the possibility of a move on interest rates this year.

The second presidential debate between Democrat Hillary Clinton and Republican Donald Trump started the week-gone-by without causing any significant moves on the major markets as investors continue to retain their view that Clinton holds an edge going into presidential election against her Republican rival. The only real market that witnessed some major moves based on the progress of the candidates was the USD/MXN(Mexican Peso) cross. The Mexican Peso rallied strongly against the USD after the Trump campaign was hit by the sexual harassment allegations against Trump.

The past week also witnessed the return of Chinese traders after a week-long break, and was marked by a significant drop in the local currency. The Chinese Yuan dipped to a six-year low against the U.S dollar last Monday, after the central bank’s announcement that the country’s foreign exchange reserves dropped more than expected in September. This drop in reserves marked a decline for the third month in a row and once again rang alarm bells over capital outflows from the world’s second-largest economy.

Chinese economic data for September set the tone for markets in the second half of the week ending on October 14th. While Thursday’s disappointing export-import data spurred concerns over weak demand in both China itself and other parts of the world such as the U.S, Europe and most part of Asia, Friday’s better-than-anticipated inflation results helped ease worries about the health of Chinese economy and spurred a bounce back in stock markets.

The U.S dollar continued to sustain its strength and finished the week higher against most of its peers as solid data on U.S. retail sales and producer prices reinforced the list of data releases supporting perceptions of a reasonably strong US economy and also reinforced perceptions of inflation making progress towards the central bank’s target.

As stated by the Census Bureau on Friday, sales at U.S. retail stores rebounded to 0.6% in September, after declining 0.3% in August. Core retail sales that strip out sales of automobiles also posted a gain of 0.5%. The data was in line with expectations. Producer prices and core producer prices, increased 0.3% and 0.2%, respectively, which were stronger than the market’s forecast.

Positive figures are believed to nudge a data-dependent Fed closer to a rate hike decision in the coming months. In an interview with The Wall Street Journal on Friday, New York Fed President William Dudley stated that he expected a rate rise to come as soon as this year.

Dudley’s remarks followed comments earlier in the day from Fed Chair Janet Yellen that indicated that the Fed might want to let inflation run hot for a while. Faced with an unusual situation of weak demand against strong supply, Yellen supposed that the central bank may be inclined to maintain easier monetary policy for longer. The comments were considered as dovish, but markets were not seeing them as a reason for the central bank to back-off from raising rates by year end.

Looking ahead to the coming week, investors focussing on the U.S dollar will be waiting for multiple economic data releases through the week. September consumer price data is due to be released on Tuesday. Building permits data is slated for Wednesday. Speeches by Fed officials including Fed Vice President Stanley Fischer and New York Fed President William Dudley are also scheduled in the week, in addition to the regular economic releases released every week such as Jobless Claims and Energy Inventories Data.

Moving on to the EU, the EUR observed the most severe weekly loss since the week ending June 24. The euro dropped below 1.10000, collapsing to the lowest since July 27th versus the U.S dollar amidst talks about the European Central Bank extending the QE at next week’s meeting. ECB President Mario Draghi has continuously stated that ECB policymakers are comfortable with the current level of stimulus, but may be willing to increase it anytime, if the economy weakens and demands a bigger stimulus.

At the last ECB meeting, President Draghi expressed more confidence about the outlook for the Eurozone economy, and even stated that the central bank had not discussed about changes to the QE program. Interest rates are expected to remain unchanged at the ECB meeting on Thursday. However, if Mario Draghi reinforces his concerns about the economy and puts greater emphasis on the need for more stimulus, further losses in the euro currency are likely.
Over in the U.K, the Sterling will also be under the spotlight next week given a busy economic calendar. From Tuesday to Thursday, the British pound will be affected by the results of data on inflation, average earnings, retail sales and employment numbers.

Above all, the outcome of the British High Court’s proceedings regarding the participation of the U.K Parliament in negotiations on the future EU-U.K. relationship will also exert significant effect on the GBP and the London Stock Exchange, not to mention indirect effects on the Euro Currency and European Stock Markets as well.

Last week, Prime Minister May made a concession to allow the Parliament to scrutinize the government’s plan for leaving the EU before she begins formal talks. However, PM May argued that she has the sole right to determine when Article 50 is invoked. In case the court finds that Parliamentary approval is needed, it would delay the process beyond the first quarter of 2017, as most parliamentarians are in favor of remaining within the EU. Nevertheless, regardless of the outcome from the high court, the case is likely to be sent to the Supreme Court, which may hear the case before the end of the year.
Out in Canada, the CAD traded higher this week as oil prices hovered near 4-month highs. No major economic reports were released during the past week, so a rise in crude prices played a key role in sustaining the Canadian dollar’s strength against its American counterpart. However, next week the focus will return to the Canadian economy, when its central bank will announce its rate decision on Wednesday. Prior to the Bank of Canada’s meeting, readings on August’ manufacturing sales will be released on Tuesday. Economic data on Canadian retail sales and inflation will round up the week for the CAD.

While the Australian dollar closed the week above the flatline, the Kiwi extended losses for the second consecutive week. In the coming week, the New Zealand dollar will take a back seat as only CPI data is due for release. In Australia, the minutes from the last central bank meeting will be released ahead of September data on the labour market. Another set of data releases that are likely to have a significant impact on the Australian dollar include Chinese third-quarter GDP data, as well as Chinese retail sales and industrial production numbers, that are slated to be published on Wednesday.

Start Trading Forex, Indices, Commodities And Hundreds of Other Markets With Capital Street FX Now!

AUD/NZD signal by Capital Street FX

From GMT 07:15 17/10/2016
Till GMT 21:00 17/10/2016

Buy at 1.07000
Take profit at 1.07400
Stop loss at 1.06460

Daily Report on October 17, 2016

Asian shares retreated on Monday along with oil prices while the U.S dollar held on to its strength against a basket of major currencies. The greenback extended its gains following strong data on U.S retail sales and producer prices for September, that was released on Friday that reinforced expectations of a December interest rate hike by the Federal Reserve.

Also contributing towards supporting the U.S dollar index to seven-month highs, were U.S Treasury yields, that were at over-four-month highs after Federal Reserve Chair Janet Yellen suggested the Fed may allow inflation to exceed its 2 percent target. Higher U.S. bond yields attract more foreign investors, consequently pushing demand for the U.S dollar up.

Fed Vice Chair and FOMC member Stanley Fischer is due to deliver a speech today after the release of September industrial output data, while the earnings season will continue with big names including the U.S’ second largest lender by assets Bank of America Corporation and New York-based technology company International Business Machines Corporation reporting third quarter results today.

Oil prices dropped early on Monday, weighed by rising rig count in the United States. Coming on top of record OPEC-output that triggered renewed fears of global glut, a closely watched report by oil services provider Baker Hughes on Friday showed four oil drilling rigs were added in the week to October 14. This marked the 16th consecutive week of a rise in the oil rig count, which indicates increasing production within the US too.

Elsewhere, Bank of Japan Governor Haruhiko Kuroda said on Monday that the central bank will adjust monetary policy as needed to achieve its 2 percent inflation target. In its monetary policy meeting last month, the BOJ announced a shift in its focus towards interest rates, instead of expanding the monetary base further, after years of massive money printing and asset purchases, which have failed to pull the economy out of stagnation.

Technicals
EURNZD

Fig: EURNZD H4 technical chart
The New Zealand dollar has been on a rally against the Euro for almost a week. The pair has breached the support at 1.55500 on Friday and may make a breakout below the upward sloping support trendline connecting the higher lows. Signaling further down moves, the short-term MA20 has crossed over the long-term MA50 from above. RSI that dipped as low as 31.62 and ADX index that has reached 38.44 consolidated the downside.
Trade suggestion
Sell Stop at 1.54400, Take profit at 1.53400, Stop loss at 1.55000

GBPJPY

Fig: GBPJPY H4 technical chart
After a period of time moving sideways between the support at 130.000 and the resistance at 132.300, the pair fell out of the range and sustains its down moves. The British Pound has been weighed down by the short-term MA20 and has stayed within the bearish territory for two weeks, as can be seen in the RSI indicator window. The continuation of the downtrend may bring the pair to as low as 125.300.
Trade suggestion
Sell Stop at 126.500, Take profit at 125.300, Stop loss at 127.700

AUDUSD

Fig: AUDUSD H4 technical chart
AUDUSD peeked out of 23.6% retracement on Friday but failed to sustain the bullish sentiment to push the pair higher. The Aussie pulled back below this level but bottomed out around 0.75800 and is approaching the 23.6% handle again. RSI is moving sideways above the 50 line, indicating a strong bull in the market. The pair is expected to breach the 23.6% resistance with support from two MAs.
Trade suggestion
Buy Stop at 0.76200, Take profit at 0.76450, Stop loss at 0.75800

GOLD

Fig: GOLD H4 technical chart
Gold proved to be resilient against the support at 38.2% Fibonacci retracement. The metal did fell below this level twice before but buyers jumped in to buy the dips every time to support the price back up to its range. The price action has crossed over the short-term MA20 and the gold market has entered the bullish zone, as indicated by the RSI chart. Gold may reach the upper boundary at 1265.00 in case the upside extends.
Trade suggestion
Buy Stop at 1256.00, Take profit at 1265.00, Stop loss at 1249.50

WTI

Fig: WTI H4 technical chart
U.S WTI has been fluctuating widely since it hit the four-month highs at around 51.60. The commodity may resume its downtrend after some corrective moves which brought the pair back to above the 50.00 level, as the short-term MA20 has crossed over the long-term MA50 above. RSI index remains below 50 line and is pointing downwards to the oversold zone, suggesting further declines.
Trade suggestion
Sell Stop at 50.00, Take profit at 49.30, Stop loss at 50.40

NASDAQ 100

Fig: NASDAQ 100 H4 technical chart
U.S Nasdaq 100 index has had a choppy trading session last Friday. The price action could not break out of the range between 4750.00 and 4840.00 and had to pull back after hitting the upper boundary. The level at 4840.00 also witnessed a failed attempt of the index to surpass the long-term MA50. A reversal into the downtrend has been confirmed by the stochastic chart where the %K line penetrated the %D line from above.
Trade suggestion
Sell Stop at 4800.00, Take profit at 4750.00, Stop loss at 4840.00

Start Trading Forex, Indices, Commodities And Hundreds of Other Markets With Capital Street FX Now!

Bank Of America Results Beat Estimates -Trading Revenue, Cost Cutting Support – Buyers Rush In

Bank of America Corp is the fourth bank to report third-quarter earnings results after a trio of U.S lenders had surprised markets with better-than-expected data. Mingling with the positive tone of its rivals, Bank of America reported pretax profit that was at its highest in a decade.

Thanks to rising bond trading and Chief Executive Brian Moynihan’s cost-cutting campaign, the second-largest U.S. bank by assets was paid off with first profit increase in three quarters. In the three-month period through September, the bank generated a profit of $4.96 billion, or 41 cents a share, up from $4.62 billion, or 38 cents a share, in the same period of 2015.

Furthermore, revenue added 3% to $21.64 billion, beating the $20.97 billion expected by analysts. Meanwhile, expenses declined 3.3% to $13.48 billion, from $13.94 billion a year ago. Mr. Moynihan promised to continue to cut annual expenses by $5 billion by 2018.

Bank of America Trade suggestion
Buy Stop at 16.05, Stop loss at 15.90, Take profit at 16.20

Start Trading Forex, Indices, Commodities And Hundreds of Other Markets With Capital Street FX Now!

“Phony Accounts” Investigations Haunt Wells Fargo– Short Positions Suggested

Shares of Wells Fargo and Co. closed in the red on Friday, even after the bank reported better-than-expected quarterly earnings. The plunge in the share price was due to concerns over reports related to the creation of about two million accounts by the company without customers’ knowledge.
On Friday, Wells Fargo reported third-quarter earnings of $5.64 billion, or $1.03 a share, down from $5.8 billion, or $1.05 a share in the same period of 2015. Profit recorded in the last quarter was about 2% lower than that of last year, as a low-interest-rate environment dented the bank’s revenue from lending operations.
Average deposits in the retail part of the San Francisco-based bank inched up 0.6% in the third quarter from $708 billion in the second quarter. The number is supposed to not completely reflect the effects of the scandal, which broke in mid-September (two weeks before the quarter ended).

However, Wells Fargo may have felt some heat from the scandal when the number of consumer checking account openings dropped 25% in September from a year earlier and 30% from August. Credit card applications and mortgage referrals from retail banking also fell sharply in September. The fourth-quarter earnings results are expected to give a better read on the damage.

Crisis has engulfed Wells Fargo – the third largest US bank by assets- since last month, when regulators fined the bank $185 million for creating approximately two million bank and credit-card accounts without customers’ consent, in order to meet high sales goals. Nonetheless, Wells Fargo will still have to face a number of ongoing investigations by regulators, as well as private lawsuits.

To help recover from the scandal, the bank has announced a series of changes including eliminating sales goals for its employees and planning to shrink its network of about 6,100 branches to cut operational costs. Still, most analysts have cut profit forecasts for Wells Fargo’s net income for 2017 to around $20.8 billion, down $300 million compared to the average estimate on September 07th, according to Thomson Reuters data.

The state of Ohio is the latest name joining a growing list of municipalities to suspend business relationships with Wells Fargo in the wake of the scandal. With other states and local municipalities, including California, Illinois, and Chicago, Ohio will ban Wells Fargo from bidding for bond underwriting and other types of business.

Additionally, the states of Massachusetts and Oregon, as well as the city of New York, have said they would press for reforms at the bank, while awaiting results of the investigations, and also review their business relationship with the company.
Fig: Wells Fargo D1 technical chart

Shares of Wells Fargo finished lower in every trading session in the last week, sending the price action back below the short-term MA20. We witnessed a four-day corrective bounce, starting on October 04th after the shares fell as low as 43.55, as sellers had to buy back shares and book profits. The last two candles with long lower shadows indicate sellers’ profit taking ahead of the weekend, therefore, the downside may extend further this week as there is still room for selling, with the price action under pressure from the MA’s placed above the price action and the deteriorating RSI index.

Wells Fargo Trade suggestion
Sell Stop at 44.70, Take profit at 43.55, Stop loss at 45.30

Start Trading Forex, Indices, Commodities And Hundreds of Other Markets With Capital Street FX Now!

Silver signal by Capital Street FX

From GMT 07:47 18/10/2016
Till GMT 21:00 18/10/2016

Buy at 17.660
Take profit at 18.000
Stop loss at 17.330

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

Daily Report on October 18, 2016

Asian markets nudged higher on Tuesday as oil prices firmed. The US Dollar Index however, weakened after mixed data on Monday and a speech from Federal Reserve Vice Chairman Stanley Fischer that outlined some factors that have been contributing to keeping interest rates low.

In a report released by the Federal Reserve Bank of New York on Monday, data indicated that the manufacturing activity index fell to -6.8 in October, after contracting to -2 in September. The Empire State index turned more pessimistic in October and posted the weakest reading since May, which is unlikely to bolster the case for a rate hike.

U.S shares closed lower on Monday. Anxiety over the U.S presidential election with the last and final presidential debate scheduled on Wednesday, the unclear situation of the Chinese economy, and risks of accelerating inflation raised risk aversion on Wall Street yesterday. Investors can be expected to close out more positions and move to the sidelines today, as a batch of Chinese economic data is slated to be published early tomorrow. The sell-off last week as a result of weak trade data from China trigger a higher degree of risk aversion among investors.

Oil prices rose in early Asian trade today, and the commodity dependent Australian Dollar was helped by the rise in the oil price, as well as the release of the minuted from the RBA's last meeting. According to the minutes, economic expansion is forecast to continue and stimulate job creation which will eventually result in higher wages and reasonable inflation. The Reserve Bank of Australia held rates unchanged at 1.5% in its October meeting and is widely expected to temporarily pause its rate cut plans at its next meeting on November 1st.

The New Zealand dollar also surged today after data showed inflation last quarter was stronger than economists had forecast. Statistics New Zealand reported on Tuesday that consumer prices rose 0.2 percent from the previous quarter, compared with the median forecast for no change in the three-month period until September.

Technicals

USDCAD

Fig: USDCAD H4 Technical Chart

USDCAD has extended its downtrend from as high as 1.33062 recorded last Thursday. The pair has been on track to complete the double top pattern after prices fell below the neck level at 1.31400. The price has broken below the upwards slopping support trendline that connects higher lows, and the short-term MA20 has crossed the long-term MA50 above the price action. The pair is expected to extend its down moves. However, since RSI has neared the oversold zone and the stochastic lines have even entered the oversold territory, a pullback will soon occur.

Trade suggestion

Sell Stop at 1.30900, Take profit at 1.30500, Stop loss at 1.31200

AUDUSD

Fig: AUDUSD H4 Technical Chart

AUDUSD has been enjoying a strong rally that brought the pair from as low as 0.75058 to surge more than 160 pips to surpass two important Fibonacci levels at 38.2% and 23.6%. On the path higher, the pair fell into a corrective pull back at one time but was supported by the two MAs placed below the price action. The Aussie is facing a firm resistance at 0.76730 which was the shoulder level in the last price cycle. However, with the wide gap between the %K line and the %D line, and an ADX index that has soared to 37.24, a breakout higher is expected.

Trade suggestion

Buy Stop at 0.76730, Take profit at 0.77000, Stop loss at 0.76430

EURNZD

Fig: EURNZD H4 Technical Chart

EURNZD has fallen below the major support at 1.53400 – the level that has forced the price to reverse higher since late September. However, the pair seems to be attempting to crawl back above this handle as the market has been trapped in the oversold territory for a while. With the ADX at an extremely high level at 62.65, a rebound upwards is anticipated.

Trade suggestion

Buy Stop at 1.53500, Take profit at 1.54775, Stop loss at 1.52850

SUGAR

Fig: Sugar H4 Technical Chart

Sugar has been trading sideways within a shrinking range. As can be seen from the indicator windows, while RSI has swung back and forth around the 50 line, the ADX has also remained below 20, which indicates no clear trend being formed in the market. However, we can see that sugar has consistently been supported by the long-term MA50 which is placed below the price action. The commodity, as a result, may surge a little higher today.

Trade suggestion

Buy Stop at 23.20, Take profit at 23.50, Stop loss at 22.80

BRENT

Fig: Brent H4 Technical Chart

Brent crude has bounced back from the support at 51.30 for the fourth time in nearly two weeks. As can be observed from the chart, lower highs are being formed and every effort by buyers to push the price higher is soon wiped out by the sellers. This suggests that there may be less room to buy or sellers are overshadowing the market currrently. Despite recent up moves, the upside seems limited as the price action has hit the resistance zone at the short-term MA20 which is placed above the price action. If the 51.30 level is breached, the commodity may fall to as low as 50.00.

Trade suggestion

Sell Stop at 51.70, Take profit at 51.30, Stop loss at 52.10

EURO STOXX 50

Fig: Euro Stoxx 50 H4 Technical Chart

Euro Stoxx 50 index created a gap up on the market open today. We have also received signals for further rallies in the index. Not only has RSI index surpassed the 50-line but the %K line has also penetrated the %D line from below, suggesting upside momentum. Still, the upside is not likely to be strong enough to help the index break out of the recent trading range, whose upper boundary is at around 3038.00.

Trade suggestion

Sell Limit at 3038.00, Take profit at 3004.00, Stop loss at 3047.00

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

IBM Earnings Continue to Fall – Growth Potential In New Businesses Encouraging – Buyers May Benefit

Shares of International Business Machines Corp. (IBM) dropped 3.04% to $150.07 per share in extended-hours trading on Monday after the company reported overall revenue that fell for the 18th consecutive quarter.

IBM earned $2.85 billion, or $2.98 a share, in the third quarter, compared with $2.95 billion in the same period last year. Excluding charges, IBM reported earnings of $3.29 a share in the quarter ending September 2016, topping economists’ forecast of $3.23 a share. IBM’s revenue came in at $19.2 billion, which was also above expectations. However revenue remained flat compared to the year-ago quarter. The company retained its 2016 projection of adjusted earnings of at least $13.50 a share.

Even after its shares reversed lower, having ticked up 0.2% in the regular trading day, outlook for the New York-based technology seems promising with some growth in newer businesses such as cloud computing and artificial intelligence. Cloud revenue grew 2.4% to $8.75 billion during the quarter.

IBM Trade suggestion
Buy Limit at 151.50, take profit at 153.00, stop loss at 150.00

Start Trading Forex, Indices, Commodities And Hundreds of Other Markets With Capital Street FX Now!