Daily Technical Analysis by Capital Street FX

DAX Soars With Commodity Prices. Can the Index Breach The 10700.00 Handle?

European stocks traded higher on Tuesday, with gains in commodity producers, banks and optimism over easy monetary policy in the Euro Zone helped shares rebound from losses suffered on Monday. The DAX30 index has added 1.24% so far to 10,633.85.

A soft U.S dollar helped lift oil and metal prices, which subsequently pushed up share prices of German energy companies. Shares of RWE – Germany’s second-largest utility – topped the market, soaring more than 3% after it reported a 10% increase in profits for the first half of 2016. The company has benefitted from the restructuring of its UK business which had been started in March. The firm said the program will take around two years to complete and will cost about 2,400 jobs from its 11,500-strong workforce.

RWE reported that its net income in the first half of this year reached €598 million ($659 million), and reiterated its earnings forecast for the full year of between €500 million and €700 million.

RWE’s rival, energy supplier EON has also had a nice performance today. Stocks of EON rose by 1.95% thus far, remaining one of the biggest gainers in the market, fueled by rising oil prices.

Mohammad Barkindo, Secretary General of the OPEC on Tuesday reinforced the participation of Russia in the highly anticipated plan to limit global oil production. Speaking at the sidelines of the “Oil & Money” conference in London, Barkindo said that Russia has been very active in trying to stabilize the oil market and that he will meet with Russia’s Energy Minister Alexander Novak next Monday to discuss the details of the output cut plan.

Out of the 30 companies in the DAX 30 index, only shares of Continental AG were trading lower today. The Hanover-based company cut its 2016 profit forecast, citing warranty costs and antitrust-fine provisions as factors that will dent profits. Higher research and development spending, as well as costs from disruptions at a supplier in Japan because of an earthquake in August will also contribute to a 480 million-euro ($529 million) fall in operating profit.


The DAX30 not only created a big gap up on the opening today, but also took off to a one-week high at around 10656.26. The strength of the recent rally can be seen on the price chart with recent candles showing almost no upper shadows. The price action has solidly crossed over both MA’s from below, with both moving averages placed below the price action and the RSI above 50. The DAX may come up against stiff resistance at the 10700.00 threshold.

Trade suggestion
Buy Stop at 10660.00, Take profit at 10700.00, Stop loss at 10600.00

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

Daily Report on October 19, 2016

China Shows Signs of Stabilization, Oil Up on Failing Supplies


Asian shares surrendered earlier gains as an unexpected slowdown in China’s industrial output overshadow gross domestic product figures that matched economists’ forecast. Chinese National Bureau of Statistics said that the country’s industrial output rose 6.1% in September from a year earlier, down from 6.3% in August and missing estimates of 6.4%.

However, there are still signs of stabilization in China as its economy was reported to expand by 6.7% compared to the same period last year, which is in line with expectations. On a yearly basis, retail sales also observed a rise that beat forecast and was up from August data. Chinese retail sales rose 10.7% in September, topping estimates and August readings which are at the same level of 10.6%.

Oil ticked higher on Wednesday on the back of the American Petroleum Institute’s report that showed crude stockpiles fell 3.8 million barrels in the week to October 14. The decline contrasted with forecast calling for a supply rise. The U.S. Energy Information Administration (EIA) is due to release official fuel storage data later today.

Also in the U.S, the Labor Department on Tuesday reported the consumer-price index increased 0.3 percent in September from the previous month, posting the fastest pace in five months. Compared with September 2015, the cost of living in the U.S. rose 1.5%, the most since October 2014. The report showed that the U.S inflation may be getting closer to the Federal Reserve’s goal thanks to a gradual pickup in housing and energy prices.

Elsewhere, the New Zealand dollar’s rally held on its strength as dairy prices reversed higher after a slump two weeks ago. At the latest Global Dairy Trade auction, the GDT price index gained 1.4% since the last sale early this month. The futures market turned to more tightening after Fonterra said it would reduce the amount of product available for sale at the auction due to lower-than-usual milk volumes for October.

Technicals
AUDNZD

Fig: AUDNZD H4 technical chart
Having reached three-month highs at 1.07632, AUDNZD slid below the 38.2% retracement. A short period of consolidation can be observed when the pair moved sideways above this level, however, the price action eventually crossed over a couple of moving averages and breached the 38.2% handle as well. This suggested a reversal into downtrend. Stochastic lines pointing downwards and ADX soaring as high as 34.38 also consolidates further declines.
Trade suggestion
Sell Stop at 1.06250, Take profit at 1.05750, Stop loss at 1.06700

EURUSD

Fig: EURUSD H4 technical chart
EURUSD resumed its downtrend after a correction from two-month-and-a-half lows at 1.09631. The pair had to give up its strength after hitting the short-term MA20 at around 1.10090 but has been trading in a thin range for a while. The bear, which is overwhelmingly dominant in the market as indicated by the RSI chart, is expected to sustain its strength after a period of gaining momentum
Trade suggestion
Sell Stop at 1.09700, Take profit at 1.09250 Stop loss at 1.10000

EURJPY

Fig: EURJPY H4 technical chart
EURJPY has breached the major support at 114.000 after being held above this level for two weeks. The pair has been under aggressively downward pressure created by two MAs hovering above the price action. Sellers continue to dominate the market and may damp the pair lower. EURJPY has penetrated a range that witnessed the pair moving sideways two time previously. If it can break below this trading range, EURJPY may find near-term support at 112.000.
Trade suggestion
Sell Stop at 113.550, Take profit at 112.000, Stop loss at 114.000

GOLD

Fig: GOLD H4 technical chart
Gold hit one-week high at around 1265.00 but failed to retain its momentum. The yellow metal has generally been trapped in a trading range between the resistance at 1265.00 and the 38.2% retracement at 1249.76. Although the price action has crossed over the MAs which have converged below the price chart, the upside seems limited. A breakout above the 1265.00 level is not expected today.
Trade suggestion
Sell Stop at 1260.00, Take profit at 1250.00, Stop loss at 1268.00

BRENT

Fig: BRENT H4 technical chart
The support at 51.30 seems quite resilient as it continued to support the price to trade higher yesterday. In general, the commodity remains moving sideways above this level and under the control of two moving averages hanging above the price action. We are observing Brent struggling with the long-term MA50 again with the RSI pointing to bullish territory. However, to confirm the uptrend, the price action needs to decisively cross over the MA50 first.
Trade suggestion
Buy Stop at 52.30, Take profit at 53.30, Stop loss at 51.30

SP500

Fig: SP500 H4 technical chart
SP500 index has crawled back from the handle at 2145.00 for the third time for the past week. The index has turned its old support into a new resistance after it breached through this level on October 11th. The price action has broken above the short-term MA20 but remained under downward pressure from the long-term MA50. The market trend is not clear, which can be observed from the under-20 ADX index and a RSI moving around average level. Considering recent bullish candles that has short bodies and long upper shadows, the market is likely to be favor of the bear.
Trade suggestion
Sell Stop at 2135.00, Take profit at 2123.00, Stop loss at 2146.00

EUR/CHF signal by Capital Street FX

From GMT 07:40 18/10/2016
Till GMT 21:00 19/10/2016

Sell at 1.08600
Take profit at 1.08420
Stop loss at 1.08720

Coffee Pares Gains after Strong Rally, Bulls May Come Back Soon

Coffee prices declined in early trading hours on Wednesday, after marching higher for five trading days in a row, as erratic rainfall in Brazil is bringing potentially supply threats to the upcoming crop. Even though coffee prices have rallied for eight out of the last ten sessions, investors betting on coffee are able to bid the commodity up even higher as the already supply shortfall situation is expected to get worse.

Brazil, the world’s second largest robusta coffee producer may have to witness another poor crop as the latest erratic rainfall could hurt they key flowering period which will directly decide yields of coffee beans. While the upcoming crop is being threatened, the last two years of drought in Brazil has damped the top grower’s production significantly.

Bad weather has also impacted the robusta crops in Vietnam – the largest robusta producer. According to market sources, the country’s worst drought in three decades caused its crop to decrease by 11% this year. Drought conditions in Vietnam have led farmer in Central Highlands to switch to grow other crops which are more economic in the use of water.

The International Coffee Organization forecast the coffee market will experience the third consecutive year in which supply has lagged behind demand. ICO on Friday anticipated poorer crops for Colombia, Indonesia, Brazil and Vietnam in the 2016/17 crop year due to unfavorable weather conditions, after estimating a supply deficit of 3.3 million bags for the 2015/16 crop year that has just ended.

Traders will likely pay close attention to the rains in Brazil. If satisfactory rainfall comes in the following weeks, the commodity will be poised for a correction, but continued concerns over dryness would definitely support upside.


Coffee retreated from four-week highs at around 159.40 after a rally that sent the commodity more than 10% higher. The coffee market entered the overbought zone and consequently pulled back as bulls has been exhausted after sustaining the price higher for a long period of time. However, after some corrective moves, coffee prices are expected to resume its uptrend with supports from two MAs placed under the price action.

Trade suggestion
Buy limit at 157.00, Take profit at 159.00, Stop loss at 155.00


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

Oil Rallies To Multi-month Peak As U.S Crude Supplies Fall Unexpectedly

Oil prices rallied on Wednesday, after the Energy Information Administration reported a surprise drop in crude stockpiles. U.S West Texas Intermediate crude reached 16-month high at $51.92 per barrel following government data that showed domestic crude supplies dropped by 5.2 million barrels in the week ended October 14th.

This is the sixth decline in the last seven weeks. The large draw in U.S. crude stocks was also supported by a decline in imports. U.S. imports were reported to fall 954,000 barrels a day from a week earlier.

Since the start of September, U.S. crude-oil stocks have dropped 26.5 million barrels.

WTI Trade suggestion
Buy Limit at 51.60, Take profit at 51.90, Stop loss at 51.40

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

Daily Report on October 20, 2016

Asian equities advanced along with the Mexican peso on the back of the third and final U.S presidential debate which was widely considered as another victory for the Democrat nominee Hillary Clinton. The latest debate between Clinton and her rival, Republican Donald Trump, did not move the financial markets as much as the previous two direct debates because there was nothing that could significantly change the prospects of Clinton’s winning the election in November.

Crude prices were almost unchanged on Thursday after surging vigorously on Wednesday due to an unexpected drop in American stockpiles. Official data by the U.S Energy Information Administration on Wednesday showed U.S. supplies dropped by 5.25 million barrels last week to the lowest level since January. Analysts had forecast an increase.

The Australian dollar dropped versus all major currencies after jobs data showed an unexpected decline in the labour market. In early Asian trading hours, the Australian Bureau of Statistics reported that job creation fell by 9,800 in Australia in September, completely contrasting with forecasts by economists which had called for an increase of 15,200 new jobs added last month.

The jobless rate fell to 5.6% from a revised 5.7% in August as a result of the fact that fewer people participated in the labor force. According to the report, Australia’s participation rate for September dropped from 64.7% to 64.5%, the lowest level in almost two years.
The Euro also hovered near its weakest since July 25th ahead of the European Central Bank policy meeting scheduled later today. Although no changes are expected to the ECB’s interest rates, markets will looking out for clues regarding the future plans for the central bank’s quantitative-easing program.

Technicals
AUDUSD

Fig: AUDUSD H4 Technical Chart
AUDUSD had broken through the resistance at 0.76880 before reaching over-two-month highs at 0.77339 earlier this week. Since then the pair has been falling back and the decline has pushed the price action to cross below the short-term MA20. As can be seen from the ADX chart, the strength of the previous rally has been weakening and the –DI line has crossed the +DI line, which suggests a reversal into a downtrend. The pair may find some support at 23.6% Fibo level.
Trade suggestion
Sell Stop at 0.76500, Take profit at 0.76150, Stop loss at 0.76900

USDCAD

Fig: USDCAD H4 Technical Chart
USDCAD broke though the support at 1.30500 yesterday to re-attempt a test of the one-month low at 1.30048. However, the pair soon regained its bullish momentum and reversed higher from this support zone. The USDCAD has slid around 300 pips from as high as 1.33062 logged one week ago. As a result bears seem exhausted and could not sustain the strength to push the market through the 1.30000 handle. Bulls consequently stepped in to push the market back into bullish territory.
Trade suggestion
Buy Stop at 1.31700, Take profit at 1.32100, Stop loss 1.31300

AUDNZD

Fig: AUDNZD H4 Technical Chart
AUDNZD dropped through the support at the 38.2% level yesterday before a mild recovery. However the market has broken through this support again today. The pair has moved back and forth around this level for two days before decisively leaving this handle behind. As can be observed from the chart, the MA20 has converged with the MA50 from above, which indicates more declines to come.
Trade suggestion
Sell Stop at 1.05700, Take profit at 1.05000, Stop loss 1.06250

Brent

Fig: BRENT H4 Technical Chart
Brent’s price action penetrated the two moving averages from below yesterday, after having been restrained below these two dynamic resistance points since last week. The market has pulled back a little bit as a result of profit taking, but is expected to resume the uptrend soon as the prices are approaching the support zone near the two MAs again and may turn these MAs into new zones of solid support.
Trade suggestion
Buy Limit at 52.00, Take profit at 53.00, Stop loss 51.20

Natural Gas

Fig: Natural Gas H4 Technical Chart
Natural fell sharply to as low as 3.142, breaching the 38.2% Fibonacci retracement level at 3.188 before pulling back. The possibility for the price to get back above this 38.2% level seems low as the market is still in the bearish zone. Coupled with the two MAs placed above the price action, the 38.2% handle is expected to be a strong zone of resistance that may push the price to reverse lower.
Trade suggestion
Sell Stop at 3.160, Take profit at 3.070, Stop loss at 3.200

DOW JONES

Fig: DOW JONES H4 Technical Chart
U.S Dow Jones futures closed higher on Thursday but have retreated in overnight trading. The index had to give up its gains as it failed to break through resistance marked by the convergence between the upward sloping trendline that connects higher lows in September and higher highs since the start of this month. The recent rally pushed the price to a retest of the one-week highs at 18244.00 and pushed the price action to cross above the two MAs. Alongside the support from MAs, higher lows created in the price action suggest a coming breakout through the trendlines.
Trade suggestion
Buy Stop at 18250.00, Take profit at 18330.00, Stop loss at 18174.00

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

Another Win for Clinton, Another Rally In Mexican Peso – Short Positions on USDMXN

The Mexican peso inched up against the U.S dollar after the conclusion of the third and final debate between Democrat Hillary Clinton and Republican Donald Trump. Since the very first debate between the two presidential nominees, which was held on September 26th, the currency pair USDMXN has dropped by more than 7.4% (the peso has been strengthening).

All three direct debates have pointed to the possibility that Clinton will win the election scheduled on November 8th. As a result, the Mexican peso, which is sensitive to Trump’s fortunes, has rallied to its highest level since September 8th to hit 18.44760 per U.S dollar. Trump has previously pledged to renegotiate or even end the two-decade-old North American Free Trade Agreement, which could spell trouble for the Mexican economy as the U.S is its biggest single export market.

Mexican Peso Trade suggestion
Sell Limit at 18.51000, Stop loss at 18.60000, Take profit at 18.25000


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

Airline and Energy Shares Limit Losses on FTSE 100 – 7000.00 Level Seems A Good Support

U.K shares pared earlier losses in early trade on Thursday after a disappointing reading on domestic retail sales weighed on British Pound. While housebuilders were still under pressures from concerns of a so-called hard Brexit, shares of energy companies continued to rally despite a retreat in oil prices.
The Office for National Statistics reported U.K retail sales were unchanged in September from August, which were below expectations of analyst who had forecast a 0.2% increase last month. After a strong summer, retail sales stagnated as soaring prices and unusual warm weather hit demand for clothing and footwear.

British consumers may come under more price pressures in the coming months as a weak pound is stocking inflation by causing imports goods to be more expensive. According to the ONS on Tuesday, U.K inflation rose 1.0% in September – the highest monthly accelerating pace since November 2014. Limited wage growth is another factor that may limit consumer spending, one of the U.K.’s key engines of growth. Figures on Wednesday showed real wages growth hit its weakest level since the end of 2015.

Oil prices pulled back on Thursday after soaring strongly yesterday owing to an unexpectedly 5.25-million-barrel drop in American stockpiles. However, bullish sentiment remained and fueled shares of London-listed energy companies. Shares of Royal Dutch Shell PLC gained 0.58%, while BP PLC added 0.08%.
Airline shares rose after German Deutsche Lufthansa AG raised its full-year earnings forecast. The Germany’s largest airline said late Wednesday that it forecast adjusted earnings before interest and taxes for 2016 to be roughly on par with last year’s €1.8 billion ($2 billion) level. U.K’s Easyjet added 2.00% and British Airways parent International Consolidated Airlines Group SA gained 2.44%.

Among issues trading in the red, housebuilders among the biggest decliners. Shares of Taylor Wimpey PLC dropped 1.86%, Barratt Developments PLC fell 1.9% and Persimmon PLC PSN, -1.12% shed 1.12%. Building-products supplier Travis Perkins PLC prolonged its slide by giving up another 0.49%, after losing 4.4% on Wednesday as the company issued a profit warning.


FTSE 100 index has been trading in a narrow range since Tuesday, which left RSI moving almost in a horizontal line and ADX dipping below 20 – the level divides a market that has a clear trend (or is forming a trend) from a market that is moving sideways. However, it seems like the index is being supported by two MAs placed below the price action which could be levels for a reversal into uptrend.

FTSE Trade suggestion
Buy Limit at 7010.00, Take profit at 7035.00, Stop loss at 6995.00


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

Silver Signal by Capital Street FX

From GMT 17:45 20/10/2016
Till GMT 21:00 20/10/2016

Sell at 17.500
Take profit at 17.420
Stop loss at 17.540

Daily Report on October 21, 2016

Asian shares trimmed its three-day streak of gains as investors digested the last round of earnings reports, while a firmer dollar weighed on crude prices. Yesterday, U.S stocks finished lower after a choppy session also because of a sharp drop in telecoms which resulted from disappointing third-quarter performances of big names such as Verizon and AT&T, and falling oil prices.

The greenback held near seven-month highs on Friday, looking set to end the week higher against a basket of six major currencies, as euro plunged sharply following comments by the European Central Bank President Mario Draghi that the quantitative easing program would not end before March 2017. President Draghi stated that the central bank had not discuss about tapering its 1.7 trillion euro ($1.86 trillion) asset-buying program, regarding a slow rise in inflation and risks from foreign weak demand.

Moving on to the U.S, data on Thursday showed that the country’s home sales swung back into monthly expansion in September after two straight months of declines. Report from the National Association of Realtors indicated existing home sales in the U.S surged to 5.47 million last month from a downwardly revised 5.30 million in August.

Out in Japan, Bank of Japan Governor Haruhiko Kuroda said the central bank may push back the timing for the economy to hit the 2% inflation target at November’s rate review. Speaking in parliament on Friday, Kuroda said that given recent weakness in core consumer prices, the BOJ may have to cut its inflation forecast at the next meeting, but he also expected an acceleration in Japanese economy next fiscal year due to brightening prospects for global growth.

Technicals
USDCHF

Fig: USDCHF H4 Technical Chart
USDCHF has retested nearly five-month high at 0.99550 and is approaching the 61.8% Fibonacci retracement at 0.99886. ADX is surging, with wide gap between the +DI and –DI line. Coupled with the RSI index which is pointing upwards, two MAs moving below the price action are supporting for the uptrend.
Trade suggestion
Buy Stop at 0.99550, take profit at 0.99880, stop loss at 0.99200

CADJPY

Fig: CADJPY H4 Technical Chart
CADJPY has been on a steady downtrend since the pair crawled back from over-one-month high at 79.648. The pair has fallen back in the trading range from 78.000 and 78.870. The pair is likely to hit the lower boundary at 78.000 but it remains uncertain for the price to break below that level as the market has neared the oversold zone.
Trade suggestion
Sell Stop at 78.310, take profit at 78.000, stop loss at 78.500

AUDNZD

Fig: AUDNZD H4 Technical Chart
AUDNZD has risen from the lowest since October 10th. The price action has penetrated both the short-term and long-term MAs, consolidating the uptrend. The Aussie has surpassed the 38.2% level and RSI index has just confirmed upbeat moves by soaring above the 50 line.
Trade suggestion
Buy Stop at 1.06640, take profit at 1.06940, stop loss at 1.06320

GOLD

Fig: GOLD H4 Technical Chart
The level at 1275.00 continued to be a tough handle to the precious metal. Gold has pulled back from this resistance yesterday and also reversed lower after hitting this level on October 5th. While the price action has crossed over the short-term MA20, which is a signal suggesting a reversal into downtrend, the RSI index has confirmed the down moves by falling back into the bearish territory.
Trade suggestion
Sell Stop at 1261.00, take profit at 1256.50, stop loss at 1265.50

BRENT

Fig: BRENT H4 Technical Chart
Brent bounced back against the support at 51.30 one more time after retreating from as high as 53.12 logged on Wednesday. The level at 51.30 has been a firm support for the commodity for more than 2 weeks. The crude price is expected to soar higher as buyers stepped in to buy the dips at psychological support.
Trade suggestion
Buy Stop at 51.45, take profit at 52.10, stop loss at 51.10

DAX

Fig: DAX 30 H4 Technical Chart
German Dax 30 has breached out of the range between the support at 10600.00 and the resistance at 10700.000 and seems to keep on surging. The index fell to as low as 106592.70 yesterday but was supported by the short-term MA20 to reverse higher. RSI is still remaining in the bullish zone and pointing upwards, indicating an overwhelming dominant bull in the market.
Trade suggestion
Buy Stop at 10725.00, take profit at 10770.00, stop loss at 10690.00

Copper To Close The Week Lower As Demand Weakens In A Still Supply Market

Copper pulled back on Friday after hitting the lowest level since September 12th at $2.0845 per pound. Nevertheless, the metal is set for a third weekly fall amidst concerns over cooling demand from China –the world’s biggest copper importer.

China has been gearing up on tightening controls on its red-hot real estate market. Housing market is a key consumer of copper in domestically large electrical goods such as refrigerators and washing machines, and power supply. Additionally, China’s disappointing industrial production figure released on Wednesday also exerted pressures on the base metal.

On the supply side, the International Copper Study Group (ICSG) on Thursday reported a 133,000-ton surplus in the global refined copper market in July, compared with a 106,000-ton deficit in June.

Copper Trade suggestion
Sell Stop at 2.0940, take profit at 2.0870, stop loss at 2.0990

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

AUD/USD signal by Capital Street FX

From GMT 06:20 20/10/2016
Till GMT 21:00 21/10/2016

Sell at 0.75930
Take profit at 0.75800
Stop loss at 0.76100

Microsoft Jumps On Upbeat Earnings Results – But Be Careful Traders

Shares of Microsoft rallied to the level they have not seen since the heyday in 1999 in after-hours trading on Thursday. The stock soared about 6% after the software giant reported quarterly revenue that beat Wall Street’s expectations by more than 12%.

Microsoft posted $22.33 billion in revenue for its first quarter in fiscal 2017, up 3.1% from the same quarter last year. The result topped analysts’ consensus of $21.69 billion.

Revenue generated from the Windows products was flat as the PC market continued to stagnate, while Lumia smartphone sales also declined. Total revenue of the unit that includes Windows software and mobile business dropped 1.8% to $9.29 billion. According to market sources, Microsoft’s worldwide PC shipments fell 3.9 percent in the quarter ended Sept. 30.

Nonetheless, the technology company’s bottom line was supported strongly by the Office 365 and Azure cloud-computing services that grew at a good clip. Sales from Microsoft’s flagship cloud product Azure, which businesses can use to host their websites and data, rose 116% to $6.4 billion. Revenue from its broader “Intelligent Cloud” business also witnessed an increase of 8.3% to $6.38 billion.

While cloud technology is setting Microsoft apart from smaller rivals, it was not the only secret that stood behind Microsoft’s big profit beat. Last month, Microsoft said its board had approved a stock buyback plan of up to $40 billion. By lowering the overall outstanding share count to 7.88 billion from 8.08 billion a year ago only, Microsoft’s earnings per share were effectively boosted by 2 cents. That is the reason why the Redmond, WA-based company still registered net income of $0.76 per share, which is 6 cents higher than that in the same quarter a year ago, while its revenue did not gain considerably.
Microsoft’s shares have been trading in a range between the support at 56.08 and the resistance at 58.62 for three months. ADX index has been moving under 20 level, indicating no clear trend in the market. The prices are moving back and forth a couple of moving averages that has twisted for a while. With the rise in extended-hour trading, Microsoft stocks are going to create a wide gap up.


Trade suggestion
Sell Limit at 60.40, Take profit at 58.70, Stop loss at 61.10

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

Daily Report on October 24, 2016

The U.S dollar edged up versus all of its major peers, reaching a fresh eight-month high against a basket of six currencies on Monday. Expectations that the U.S Federal Reserve will raise interest rate by the end of this year were further buoyed by San Francisco Fed President John Williams, whose remarks pointed to a hawkish tone. Speaking on Friday at a mortgage conference, President Williams stated that the Fed should increase rates gradually, “preferably sooner rather than later”.

According to data from the Commodity Futures Trading Commission released on Friday, speculators increased their net long position on the dollar to $18.44 billion in the week ended Oct. 18, from $14.72 billion the previous week. That was the fourth consecutive week that investors have raised their bets on the greenback, which sent the currency’s net long positions to the highest since late January.

Meanwhile, Japan’s Ministry of Finance reported on Monday that Japanese exports fell 6.9% in September from a year earlier. The rally in the Yen undermined export prices and extended the export decline for a 12th straight month. However, exports rose 4.7% in terms of volume in the year to September, thanks to Asian demand for iPhone-related parts, and car sales in Europe.

Also in Japan, Markit Flash Manufacturing PMI for October was reported to tick up to a seasonally adjusted 51.7 – the fastest pace in nine months, led by mounting new orders. The Bank of Japan will hold its policy meeting on November 1st, and is expected to make no changes to its current stimulus program.
Crude oil prices fell at the start of the new week after Iraq’s oil minister Jabar Ali al-Luaibi said on Sunday that the nation should be exempted from production cuts proposed by the Organization of Petroleum Exporting Countries. Citing the war with Islamic militants that Iraq is struggling with, as the reason, Luaibi claimed the same exemption as other OPEC-members Nigeria and Libya.

Technicals
EURAUD

Fig: EURAUD H4 Technical chart
After having swung back and forth around the 38.2% level at 1.46850 for two weeks, EURAUD eventually breached below this handle on October 10 and has been under downward pressure from the two MAs placed above the price action since then. Staying in a bearish market as indicated by the RSI chart, the pair is approaching the 50.0% retracement at 1.40994.
Trade suggestion
Sell Stop at 1.42500, Take profit at 1.40100, Stop loss at 1.43200

AUDJPY

Fig: AUDJPY H4 Technical chart
As can be observed from the chart, AUDJPY has been on a rise for almost a month. After a correction that sent the pair from three-month highs at 80.000 to as low as 78.710, the Aussie pulled back against the Japanese Yen from the upward sloping trendline that connects higher lows since September 27. The resistance at the 23.6% retracement level is within sight.
Trade suggestion
Buy Stop at 79.250, Take profit at 79.600, Stop loss at 79.000

USDCAD

Fig: USDCAD H4 Technical chart
USDCAD retreated from over-six-month highs at 1.33550 after surging sharply from as low as 1.30048 logged last Wednesday. The pair has broken the 38.2% level at 1.33111 and may turn this major Fibonacci retracement into its new support level, as the recent decline is expected to be a short correction after the market entered into the overbought zone.
Trade suggestion
Buy Limit at 1.33111, Take profit at 1.33550, Stop loss at 1.32950

GOLD

Fig: GOLD H4 Technical chart
Gold has been trading in a thin range around the 23.6% handle at 1264.73. The precious metal attempted to break below the 23.6% level but the short-term MA20 is fueling bullish momentum in the gold market. The RSI has also failed to move past the 50 line, suggesting strong bulls in the market.
Trade suggestion
Buy Stop at 1267.50, Take profit at 1275.00, Stop loss at 1262.00.

WTI

Fig: WTI H4 Technical chart
U.S crude prices are moving sideways under the 20-period moving average. The two MAs have turned into dynamic resistance after the price action crossed below them from above. As can be seen from the Stochastic chart, the %K line has penetrated the %D line from north to south, indicating a reversal into downtrend. In the event of continual downward pressure being exerted by the two MAs, WTI prices may stumble to as low as 49.35 - the lowest since October 13th.
Trade suggestion
Sell Stop at 50.55, Take profit at 49.35, Stop loss at 51.00

NASDAQ 100

Fig: NASDAQ 100 H4 Technical chart
The Nasdaq 100 index created a gap up on the market open on Monday and looks set to retest the highest level since October 18th at 4861.00. The price action has crossed through the two moving averages from below, suggesting an uptrend. With the confirmation from the RSI index that has soared to as high as 57.98, the Nasdaq 100 may face resistance at 4880.00
Trade suggestion
Buy Stop at 4861.00, Take profit at 4880.00, Stop loss at 4840.00

EURUSD Crawls Back from Multi-month Lows – Will the Slide Resume?

The euro rose against the U.S dollar on Monday. EURUSD snapped a four-day losing streak to pull back from the lowest level in the last six and a half months at $1.08584, logged on Friday. The recovery in the euro today came after a string of upbeat data from key Eurozone countries and composite data fro the EU as a whole.

Research group Markit on Monday reported Eurozone composite purchasing managers’ index for October accelerated at the fastest pace since the beginning of 2016. The gauge which measures the combined output of both the manufacturing and service sectors, took off to a ten-month high at 53.7 in the current month, from September’s reading of 52.6.

Particularly, manufacturing PMI for the region rose to a 30-month high at 53.3, while the services PMI jumped to the highest level since April 2016 at 53.5. All data releases beat expectations by analysts.

Earlier Monday, Markit reported that its manufacturing PMI reading for Germany – Europe’s largest economy – rose to 55.1 in October from 54.3 the previous month, beating forecasts which called for an unchanged reading. Not only did the manufacturing index hit a 33-month high, the German services PMI also climbed to a 3-month high at 54.1 this month, which topped expectations for an uptick to 51.5.

Markit also reported that France’s manufacturing PMI rose to 51.3 in October from 49.7 in the month before. However, the French services PMI was an exception and it slipped to 52.1 this month from 53.3.

In general, the Eurozone economy continued to prove to be resilient, which dampened the possibility that the European Central Bank will extend its stimulus program in December – three months before quantitative easing is currently set to expire.

The single currency fell to near seven-month lows against the U.S. dollar on Friday based on perceptions of a potential divergence between monetary policies of the ECB and the U.S Federal Reserve. While the Fed is highly expected to raise its rate by the end of this year, investors expect that the ECB’s buying-asset program will not end before its scheduled expiry. President Mario Draghi indicated last week that the mentioned program would not be ended abruptly without being tapered first and the bank has not discussed any tapering plan in its October meeting.

Draghi will be speaking at the German Institute for Economic Research, in Berlin on Tuesday, but before that, Federal Reserve Bank of New York President William Dudley and Federal Bank of St. Louis’s James Bullard will deliver separate speeches later today.

EURUSD breached another key Fibonacci retracement level after breaking below the 38.2% and 50.0% levels. The pair broke through the 61.8% handle at 1.09250 on Friday and the market entered the oversold zone. Therefore, a rally fueled by upbeat data today may be considered as a correction. With the two MAs hovering above the price action, the pair may reverse lower to test the key support at 1.08000.


EURUSD Trade suggestion
Sell Stop at 1.08600, Take profit at 1.08000, Stop loss at 1.08900

USD /CHF signal by Capital Street FX

From GMT 16:00 24/10/2016
Till GMT 21:00 24/10/2016

Sell at 0.99290
Take profit at 0.99080
Stop loss at 0.99550

USDCAD Rallies As Markets Bet On December Fed Rate Hike

USDCAD rose to the highest level since March 16th at 1.33958 on Monday, extending the rally to a fourth straight trading day.

The Canadian dollar lost the support extended via the oil price, as oil stumbled following the Iraqi oil minister’s comments on Sunday that the nation should be exempted from production cuts proposed by the OPEC. The U.S dollar strengthened after St. Louis Federal Reserve President James Bullard’s hawkish remarks on interest rates.

Speaking on the U.S. economy and monetary policy at a conference on Monday, Bullard reinforced his previous comments by reiterating the necessity of a U.S rate hike this year.

The case for raising interest rates was strengthened as a report from Markit indicated that U.S. Manufacturing activity hit the highest level in a year this month with the index at 53.2, beating forecasts of a slight increase to 51.6.

Trade suggestion

Buy Stop at 1.34000, Take profit at 1.34430, Stop loss at 1.33550

Third-Quarter GDP Reports in Focus, Will U.S Dollar Sustain Its Strength Next Week?

The U.S dollar was a star last week, as the monetary policy divergence between the U.S Federal Reserve and other major central banks sent the greenback higher against most of its peers.

The dollar strengthened after New York Fed President William Dudley on Wednesday said that the U.S. central bank will likely raise interest rates later this year if the economy remains on its current trajectory. Furthermore, expectations that Hillary Clinton will win the U.S. presidential election grew strongly after her victory in the third and final U.S presidential debate. This also added to the view that a December rate hike is likely. Fed will hold its next meeting in November. Still, a rate hike ahead of the presidential election is considered as unlikely.

Expectations for higher rates typically boost the dollar by making it more attractive to yield seeking investors. However, it would be misjudged if we didn’t mention the slump of the euro when it comes to the greenback’s strength.

The euro plunged sharply on Friday following comments by the European Central Bank President Mario Draghi that the quantitative easing program would not end before March 2017. President Draghi stated that the central bank had not discuss about tapering its 1.7 trillion euro ($1.86 trillion) asset-buying program, regarding a slow rise in inflation and risks from foreign weak demand.

A string of data for the Euro area will be released next week. The single currency will start its volatility on Monday with Markit flash PMIs for key Eurozone countries (Germany and France) as well as for the whole region. The German Ifo survey out on Tuesday is expected to show a slight improvement in the current conditions index. More economic data for the 28-nation bloc will follow on Friday with the Eurozone’s economic sentiment index and preliminary German inflation numbers.

Following a conference following the policy reviews last Thursday, ECB President Mario Draghi will have another speech about “Stability, Equality and Monetary Policy” on Tuesday.

In the U.S, the most important statistic is probably the release of third quarter growth on Friday. However, other economic parameters such as durable goods orders, housing data and business surveys will keep traders occupied until the key Friday’s Advance GDP, which is forecast to post at the highest since the last quarter of 2014.

If the preliminary third quarter GDP data meets economists’ expectation of a substantial growth rate of 2.5% in the third quarter, the US economy will have a well performance during the second half of the year given the weakness that occurred during the first six months of 2016. Strong economic growth and an improving labor market will give the Fed fewer reasons to delay a rate increase in December.

The Pound ended last week higher versus the U.S dollar thanks to the U.K inflation data, which was reported to have jumped to its highest in nearly two years.

Data from the Office for National Statistics reported that U.K consumer prices added 1% in September compared to the same month a year ago, following a 0.6% rise in the year to August. The reading outstripped expectations of a rise to 0.9%, and reached the 1% rate for the first time since November 2014. ONS said it did not see explicit evidence of the pound’s weakness in consumer-price changes, but it is affecting producer prices as a cheaper local currency pushes up the price of imported goods in the UK.

The rise in the U.K’s inflationary pressures may drive the Bank of England away from its plan to cut rates in order to protect the economy from headwinds created by the departure of the U.K from the single market.

For next week, like the U.S., the U.K. will also announce its preliminary growth estimate for the third quarter, which is due on Thursday. The data will be of more importance than usual as they are for the three months immediately following the Brexit referendum on June 23. . Growth is expected to slow to 0.3% quarter-on-quarter in the three months to September from the previous quarter’s 0.7% rate. Consensus data suggested that the impact of Brexit may not be felt much, as strong consumer spending and a weaker pound have kept the UK economy in a better mood than initially expected . A strong number would damp the need for further easing by the BOE.

The Australian dollar was almost unchanged compared to the level at the start of last week after the market close on Friday. The Aussie stayed strong on the first half of the week through October 21st after the release of the minutes 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.

However, the bullish sentiment left the Aussie on Thursday after jobs data showed an unexpected decline in the labour market. In early Asian trading hours, the Australian Bureau of Statistics reported that job creation fell by 9,800 in Australia in September, completely contrasting with forecasts by economists which had called for an increase of 15,200 new jobs added last month.

The jobless rate fell to 5.6% from a revised 5.7% in August as a result of the fact that fewer people participated in the labor force. According to the report, Australia’s participation rate for September dropped from 64.7% to 64.5%, the lowest level in almost two years.

Next week, AUD investors will put their focus on the inflation data due on Wednesday as it could determine whether the Reserve Bank of Australia decides to cut rates anytime soon. CPI in the third quarter is expected to pick up slightly to 0.5% on a quarterly basis and to 1.1% on a yearly basis.

The New Zealand dollar also traded lower against the greenback last week. However, the Kiwi outperformed its Australian counterpart due to upbeat inflation and consumer prices. Next week will be quiet for the currency as only New Zealand’s trade balance is on the calendar.

Canadian dollar plunged the most in the trio of commodity currencies. Retail sales continued to decline while consumer prices grew less than expected. Bank of Canada Governor Stephen Poloz stated that the central bank had “actively” discussed the possibility of injecting more stimulus into the economy.

The Bank of Canada decided to hold its benchmark interest rate at 0.5 percent at its monetary policy meeting on Wednesday, but further stimulus were taken consideration in order to “speed up the return of the economy to full capacity”, Poloz said.

With the lack of Canadian data next week, oil will continue to be a key driver of the currency’s flows.

Daily Report on October 25, 2016

The U.S dollar held near eight-month highs amid mounting speculations that the U.S interest rate will be raised by December. Federal Reserve Bank of Chicago President Charles Evans on Monday said if the economy continued to grow in line with forecast, it would be appropriate for the Federal Reserve to raise rates three times by the end of 2017.

The Chicago Fed chief was optimism about the U.S. labor market, expecting for continued hiring which could push the unemployment rate down to as low as 4.5 percent without triggering undue inflation. Earlier on Monday, research group Markit reported the U.S. flash manufacturing purchasing managers’ index for October rose to the highest since the start of this year. The gauge for manufacturing activity in the world’s biggest economy reached 53.2 in this month, beating forecast and cementing bets the Fed will make a move on rates in December.

The Loonie pared earlier losses on late Monday as Bank of Canada Governor Stephen Poloz signaled a deferral in cutting rate, even after the country’s disappointing economic data lately. Given the uneven growth in different parts of Canada, Poloz reiterated the central bank considered cutting interest rates but said further stimulus is complicated. Any decision to cut interest rates further will not be unleashed in the next 18 months, the BOC Governor said.

The comments that spurred speculation monetary policy would stay on hold, lifted Canada’s dollar from a seven-month low set earlier on Monday. However, the currency dropped again as in an e-mailed statement following the testimony, Poloz said the comments weren’t a reference to monetary policy.

Swiss National Bank Chairman Thomas Jordan deepened the monetary policy divergence between the U.S central bank and its counterparts by stating that the SNB could cut its negative interest rates even more if needed as there is still room for further stimulus.

Technicals
USDJPY

Fig: USDJPY H4 Technical Chart
The U.S dollar has been on a rise against the Japanese Yen since the pair hit over one-week low at 103.159 last Wednesday. After breaking above the two moving averages from below, the pair has turned these two MAs into its dynamic support. Additionally, we have received signals of going long, as the short-term MA20 has crossed over the long-term MAs, while ADX rebounded from line 20. However, the resistance at 23.6% is within the sight may be the short-term target.
Trade suggestion
Buy Stop at 104.450, Take profit at 104.750, Stop loss at 104.200

AUDUSD

Fig: AUDUSD H4 Technical Chart
The Aussie once again crawled back from the 23.6% retracement. This level has played an important part in supporting the price in the past week since the pair returned to trade above this handle. Recent surge brought market into the neutral zone, which can be observed from the RSI index hovering around the line 50. In the event of continual rally, AUDUSD may form a double top pattern.
Trade suggestion
Buy Stop at 0.76400, Take profit at 0.76900, Stop loss at 0.97150

GBPJPY

Fig: GBPJPY H4 Technical Chart
Recent rally has brought the pair GBPJPY back to the bullish market. As can be seen from the RSI indicator window, the index has soared to as high as 56.74. The price action has penetrated the two MAs from below, consolidating the uptrend. The pair is approaching the upper boundary of the trading range at 128.500.
Trade suggestion
Buy Stop at 127.760, Take profit at 128.500, Stop loss at 127.400

SILVER

Fig: SILVER H4 Technical Chart
Silver has been trading in a thin range for more than 2 weeks. The metal has been moving back and forth around a couple of moving average which has twisted under the price action since yesterday. Although RSI has bounced back from the average line, the rally seems limited.
Trade suggestion
Buy Stop at 17.680, Take profit at 17.940, Stop loss at 17.485

Natural Gas

Fig: Natural Gas H4 Technical Chart
Natural Gas has been suffering a steep decline that witnessed the commodity falling from multi-month high to one-and-a-half-month lows. Natural gas has fell below the 23.6% Fibonacci retracement and may approach other major level at 38.2% threshold. While the market has already dipped in the oversold zone, ADX continued to hold high. No signal of a reversal has appeared yet.
Trade suggestion
Sell Stop at 2.810, Take profit at 2.700, Stop loss at 2.850

DOW JONES

Fig: DOW JONES H4 Technical Chart
U.S Dow Jones index has been struggling below the 18255.00 resistance since mid-October. The benchmark broke above both the short-term and long-term MAs yesterday and found the support at the MA20 when it fell off from the 18255.00 handle. Coupled with the RSI above 50 and pointing upwards in the, the convergence of the two MAs below the price action suggests a breakout today.
Trade suggestion
Buy Stop at 18260.00, Take profit at 18320.00, Stop loss at 18210.00

Gold Reclaims Lost Ground But Not Likely To Win The War With The Dollar

Gold edged up in European session on Tuesday, boosted by rising demand, especially in the world’s two largest consumers of the metal. However, prices have been kept in a range as an increasing probability of a U.S. interest rate hike fueled the U.S. dollar, in which gold is priced.

In China, further weakness in the local currency and investors’ concerns about government’s stringent measures to cool down the property market are seen as a boost for gold demand. The offshore Yuan hit a six-year low against the dollar before partially recovering on Monday. Large state-owned banks had to sell dollars yesterday in an effort to slow a rapid decline in the currency.

However, the Yuan is likely to remain weak as Chinese policy makers have signaled they are willing to allow greater currency flexibility against the backdrop of a slump in exports and a strengthening dollar. Potential Yuan depreciation and restricted investment in the property market may be the main drivers of Chinese gold purchases.

According to figures from the website of Swiss Federal Customs Administration, shipments of gold from Switzerland to China increased to 35.5 metric tons last month from 19.9 tons in August.

In India, seasonal demand is picking up. Dhanteras and Diwali – the country’s most eagerly-awaited festivals – are around the corner. Dhanteras – the first day of the five-day Diwali Festival – falls on October 28th but many Indians have visited the bullion market to buy gold. After Dhanteras and Hindu festival of Diwali this weekend, wedding season will follow. Good rains this year is expected to pushed up rural incomes and in turn boost rural purchases, which make up 60 percent of consumption.

Despite ongoing healthy demand, it will be hard for gold to rally as the greenback has been on a steady rise. Traders are currently pricing in a more than 70% chance of a rate hike at the Fed’s December meeting, following positive economic data and hawkish comments from Fed officials.
Gold is sensitive to moves in the U.S dollar price and U.S rates, as a stronger buck makes gold more expensive to purchasers using other currencies, while higher rates raise the opportunity cost of holding non-yielding assets such as bullion.

Gold prices have been kept range-bound for the past week after pulling back from the 38.2% retracement at 1249.79. Gold reversed higher today following three-day losing streak but the upside seems limited. The rally is being threatened by the upper boundary at 1274.50 and the short-term DMA20. As the gold market is still in favour of bears, the metal is expected to retreat once it hits the 1274.50 resistance.

GOLD Trade suggestion
Sell Limit at 1274.50, Take profit at 1260.00, Stop loss at 1280.00


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