Daily Technical Analysis by Capital Street FX

Strong Economic Data Overwhelm Oil Slide, Sending SP500 Higher

U.S. shares shrugged off early losses to turn higher on Tuesday, hovering near all-time record high logged last Friday. The benchmark SP500 index edged 0.3% higher, boosted by a slew of better-than-expected economic reports, which overshadowed a drop in crude prices.

The Conference Board on Tuesday reported the U.S. consumer confidence soared to prerecession levels in November. The index advanced to the highest since July 2007 at 107.1, comfortably beating analysts’ forecasts for an increase to 102 in November.

The U.S. economy was reported to grow at the fastest pace in over two years in the third quarter. Besides surging exports, the rally was also powered by consumers and government that stepped up their spending. According to the Commerce Department, gross domestic product expanded at a 3.2% annual rate – the strongest pace since the second quarter of 2014.

At the time of trading, eight of the 11 main sectors were trading higher, led by real estates and health care shares. Energy sector was down 1.35% as oil futures ticked lower ahead of a key meeting of major crude producers.

Trade suggestion
Buy Stop at 2208.00, Stop loss at 2205.00, take profit at 2213.00

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Daily Report on November 30, 2016

The U.S. dollar headed for its sharpest one-month advance since May as Treasuries fell, sending yields higher that spurred gains in the greenback. The U.S. dollar, which tracks the greenback against a basket of six major peers, climbed 0.17 percent to 101.16 in the second half of Asian trading session.

Industrial metals extended their declines to a second-straight session after the London Metal Exchange Index reached the highest since May 2015 on Monday. While copper hit one-week low at $2.5500/lb, tin and nickel each slumped at least 0.7 percent. The London Metal Exchange Index may fall further to day after tumbling 3.4 percent on Tuesday, its biggest one-day retreat in more than a year.

Crude oil futures reversed higher in nervous trading on Wednesday ahead of an OPEC meeting later in the day. International Brent crude hit an intra-day high at $47.43 per barrel, up 2.4% from its last close. Meanwhile, U.S. West Texas Intermediate (WTI) crude was up 2.1% to $46.14 per barrel. The Organization of the Petroleum Exporting Countries is trying to thrash out an output cut deal and is expected to deliver such an agreement later today.

The American Petroleum Institute late Tuesday reported crude oil inventories in the U.S. fell 720,000 barrels last week, following a draw of 1.28 million barrels the previous week. The reading was 120,000 barrels more than expected.

Elsewhere, according to the Ministry of Economy, Trade and Industry, Japan's industrial output expanded for a third straight month in October. Supported by exports of electronics and other products to China, Japanese output rose 0.1% month-on-month following a rise of 0.6% in September.

Technicals
AUDNZD

Fig: AUDNZD H4 Technical Chart
AUDNZD has been nose-diving from the resistance at 1.05900. The pair has broken the 23.6% retracement and is expected to test over one-week low at 104.150. However, as can be observed from two indicator windows, the market has entered the oversold zone, implying an upcoming correction.
Trade suggestion
Buy Limit at 104.150, Take profit at 1.04800, Stop loss at 1.03800

EURCAD

Fig: EURCAD H4 Technical Chart
EURCAD pulled back after a correction from the start of this week. The pair had rebounded from the lowest level since late-April at 1.41650 and sent the market to the overbought zone. As can be seen from the Stochastic chart, the %K line has crossed over the %D line from above, suggesting a reversal into a down trend.
Trade suggestion
Sell Stop at 1.42700, Take profit at 1.42000, Stop loss at 1.43000

WTI

Fig: WTI H4 Technical Chart
Crude price scaled back from the 23.6% Fibonacci level, looking set to complete the double bottom pattern as the price is likely to surge past the neck level at 50.0% retracement. In the event of continual upbeat moves, the commodity prices may attempt the next Fib. level at 61.8%.
Trade suggestion
Buy Stop at 47.50, Take profit at 48.50, Stop loss at 47.00

CAC40

Fig: CAC40 Index H4 Technical Chart
CAC40 index is struggling under the 61.8% retracement after failed to breach this level. However, bullish momentum supported by two MAs is expected to sustain the price’s rally. RSI is pointing upwards, consolidating further advance. The French benchmark may test the resistance at 4600.00 threshold.
Trade suggestion
Buy Stop at 4570.00, Take profit at 4600.00, Stop loss at 4560.00

Royal Bank of Scotland Plunges As The Bank Fails BOE Stress Test

Shares of Royal Bank of Scotland Group plummet nearly 5% on Wednesday as state-backed lender failed this year’s stress test of seven British lenders. According to the Bank of England, RBS must come up with a revised plan to raise capital by around £2 billion ($2.49 billion).

The bank rushed out a statement following the announcement, stating that it would take a range of actions, including selling off bad loans and cutting costs to make up the capital shortfall and meet regulatory requirements.

The annual health checks also revealed capital inadequacies at two other banks, namely Barclays PLC and Standard Chartered PLC, but neither bank needs to change its capital plans as they have already undertaken capital strengthening measures.

The result underlines RBS’s problems including a rising legal bill for misconduct ahead of the 2008 financial crisis, not to mention difficulties selling off assets such as its Williams & Glyn banking business.

Trade suggestion
Sell Stop at 188.70, Take profit at 187.00, Stop loss at 189.50

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CAD/CHF signal by Capital Street FX

From GMT 07:00 30/11/2016
Till GMT 21:00 30/11/2016

Buy at 0.75500
Take profit at 0.75800
Stop loss at 0.75350

OPEC To Trim Output For The First Time In 8 Years, Brent Soars

International Brent crude jumped more than 8% on Wednesday after the Organization of the Petroleum Exporting Countries agreed to curb oil output for the first time since 2008.

Brent crude futures for January delivery soared to one-month highs at $50.45 per barrel, on course for their biggest one-day move in nine months. According to an OPEC source, the 14-nation cartel has reached an output limiting deal in order to splash production by 1.2 million barrels a day to 32.5 million a day.
The move aims at draining a crude glut that’s pushed down prices for two years, which will help oil-producing countries revive their tattered finances.

It’s not yet known how deep key OPEC member Saudi Arabia will cut but the kingdom had already stated that it had been prepared to accept “a big hit” on its own production. The largest oil producer of the OPEC also agreed to allow its rival Iran to freeze output at pre-sanctions levels.

The agreement is also reported to call for a reduction of about 600,000 barrels a day by non-OPEC countries
The U.S. Energy Information Administration on Wednesday said domestic crude supplies fell by 884,000 barrels in the week ending November 25. The figure contrasted with analysts’ expectations for an increase of 636,000 barrels.

Brent crude price has not only broken above the 23.6% retracemnet but also crossed over both short-term and long-term MAs, suggting a strong bullish momentum. The advance has sent the oil market into a bullish territory. As RSI keeps surging, Brent crude is expected to test the resistance at 51.00.


Trade suggestion
Buy Stop at 50.00, Stop loss at 51.00, take profit at 49.50

Daily Report on December 1, 2016

Crude prices extended their gains on Thursday after soaring strongly on Wednesday as the Organization of the Petroleum Exporting Countries agreed to its first output cut since 2008. Energy shares were given a fresh boost, fueling global benchmark indexes to sweep higher. The MSCI Asia Pacific Index added 0.7 percent with a sub-gauge of energy stocks jumping 4.4 percent. Japan’s Topix index reached highest level since January, rallying 0.9 percent, while Hong Kong’s Hang Seng Index was up 0.6 percent.

OPEC finally took action to clear a glut that has reigned in the market for two years. West Texas Intermediate crude rose more than 1% to trade as high as $50.22 after surging 9.3 percent last session, the biggest one-day gain since Feb. 12. The commodity finished November up 5.5 percent. The OPEC-led deal was broader than expected, given that the output-cut agreement extended beyond the bloc with Russia also joining output reductions for the first time in 15 years.

Meanwhile, after less than a year rejoining the OPEC, Indonesia has suspended its membership of the cartel. The net oil importer said it could not agree to the group's production cuts level which was offered at 37,000 barrels per day (bpd), or about 5 percent of Indonesia’s output.

Elsewhere, Bank of Japan board member Makoto Sakurai on Thursday cleared doubts that the central banks’ bond-buying program was nearing a limit, saying the BOJ would continue to buy massive amounts of government bonds even under a new policy framework targeting interest rates. Speaking in a conference in the city of Otsu, western Japan, Sakurai also underlined supports and efforts of Japanese government and companies to help BOJ beat subdued inflation and growth in Japan by raising wages and promoting innovation.

Technicals
USDJPY

Fig: USDJPY H4 Technical Chart
USDJPY has been struggling around the 61.8% Fibonacci retracement since yesterday. This is the highest level since early March. The pair reached the overbought market on Wednesday and had to retreat as investors took profit. However, with a market in favor of buyers, USDJPY may break above this level to test the resistance at 116.000.
Trade suggestion
Buy Stop at 114.500, Take profit at 116.000, Stop loss at 113.800

AUDUSD

Fig: AUDUSD H4 Technical Chart
AUDUSD has given up its bullish strength to reverse lower after hitting the short-term MA20. The pair extended its down moves following a correction from one-week lows at 0.73734. As RSI is pointing to the oversold zone and two MAs are exerting downwards pressure on the price, AUDUSD may fall to as low as 50.0% level.
Trade suggestion
Sell Stop at 0.73800, Take profit at 0.73300, Stop loss at 0.74100

SILVER

Fig: SILEVR H4 Technical Chart
SILVER has pulled back from 61.8% retracement. Under pressure from two MAs and the Fibonacci level, the metal is anticipated to extend its downside. RSI index has scaled back from the 50 line, suggesting an overwhelmingly dominant bearish force.
Trade suggestion
Sell Stop at 16.300, Take profit at 16.000, Stop loss at 16.450

BRENT

Fig: BRENT H4 Technical Chart
Brent has been trading sideways under a solid resistance at 52.70. The commodity which soared vigorously from the 23.6% retracement has neared the overblown market. Therefore, a consolidation at this level is understandable. The short-term MA20 has converged with the long-term MA50 from below, supporting further advances.
Trade suggestion
Buy Stop at 52.70, Take profit at 53.80, Stop loss at 52.00

AUD/CAD signal by Capital Street FX

From GMT 07:30 01/12/2016
Till GMT 21:00 01/12/2016

Sell at 0.99000
Take profit at 0.98600
Stop loss at 0.99300

Toronto-Dominion Bank Posts Upbeat Earnings, Fueled by U.S. Business

Toronto-Dominion Bank reported its fourth-quarter earnings on Thursday, which matched market expectations thanks to strong growth at the lender’s U.S. retail business.

The Canada’s second-biggest banking and financial services corporation announced earnings of $1.22 per share in the fiscal fourth quarter ending October 31st. The result was up from $1.14 in the same period last year and in line with average forecast by analysts.

TD’s net income, excluding one-off items, advanced to $2.35 billion, up from $2.18 billion the year before. As a result, net income stripping out non-recurring components rose to $9.29 billion for the full fiscal year. The lender had only generated $8.75 billion the year before.

Trade suggestion
Buy Stop at 47.35, Stop loss at 48.00, Take profit at 47.00

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Falling U.S. Stockpiles Magnifies Cooler Weather Effects on Natural Gas

U.S. natural gas continued to edge higher on Thursday, bolstered by new federal data that showed the additional amount of gas in storage fell last week amidst cooler forecasts which helped raise expectations for demand.

Natural-gas futures for January delivery jumped more than 3.5% to $3.501 a million British thermal units on the New York Mercantile Exchange. Natural gas has been on a rise, rallying around 25% in the last two weeks, approaching the 10-month highs at $3.544/mmBtu logged on October 18th.

The U.S. Energy Information Administration on Thursday reported that natural gas stockpiles dropped by 50 billion cubic feet last week. The draw sent total natural-gas stocks now stand at .995 trillion cubic feet, 0.6% above levels from last year and 6.25% above the five year average.

Meanwhile, latest forecasts show below-average temperatures spreading across most of the country starting next week. Lower temperatures will increase natural gas demand for heating, helping to dispel fears that a glut of supply will continue to weigh on prices.

Natural gas is heading for the 0.0% Fibonacci level after rebounding from the 50.0% retracement. Although the ADX index is soaring with a wide gap between the +DI and -DI lines, RSI has neared the overbought zone. Given the strong resistance at 0.0% level, that handle can be the near-term target.


Trade suggestion
Buy Stop at 3.500, Take profit at 3.540, Stop loss at 3.480

Daily Report on December 02, 2016

The U.S. dollar eased against most of its peers on Friday as investors eagerly waiting for a monthly U.S. jobs report that could be the main factor driving the currency in coming days. The dollar index, which tracks the strength of the greenback versus a basket of six major currencies, poised to close the week lower. The index pared some losses in the European morning session but has dropped 0.5% for the week.

On the contrary, the euro firmed around $1.06700 having gained 0.9 percent so far this week. The Italian referendum on Sunday remains the focus for the common currency. The referendum could reject Prime Minister Matteo Renzi's constitutional reforms and worsen Italy's fragile banking system, potentially sapping investor confidence in the currency union.

Crude prices turned lower in Asian trading hours before regaining some bullish momentum in European trade. Optimism over this week's OPEC-Russia accord on cutting output has fueled Brent’s rally to reach 16-month high on Thursday. However, traders are now focusing their attention on implementation of the deal when OPEC holds talks with non-OPEC producers on Dec. 9.

Elsewhere, Australian retail sales were reported to advance for the third consecutive month in October. The national statistics bureau on Friday announced that retail sales rose at a seasonally adjusted 0.5% to $25.616 billion, following a gain of 0.6% in September. The upbeat figure was boosted by food retailing, household goods and cafes and restaurants, which offset declines at department stores and clothing retailers. Retail sales account for more than half of Australia’s gross domestic product (GDP).

Technicals
EURGBP

Fig: EURGBP H4 Technical Chart
EURGBP reversed lower as the bullish force failed to beat pressure from two MAs hanging above the price action. RSI has also pulled back from the central line which indicates a strong bearish momentum. Down moves may bring the pair to as low as 38.2% level.
Trade suggestion
Sell Stop at 0.84400, Take profit at 0.83950, Stop loss at 0.83750

EURCAD

Fig: EURCAD H4 Technical Chart
EURCAD has been struggling around the lowest level since late April at 1.41780. The pair has been trading sideways to lower with two MAs lingering above the price action. RSI pointing to the oversold zone supports further declines.
Trade suggestion
Sell Stop at 1.41600, Take profit at 1.40600, Stop loss at 1.42100

NASDAQ 100

Fig: NASDAQ 100 Index H4 Technical Chart
NASDAQ 100 index continued to slump following a breakout from the slopping downward support that connects lower highs. The short-term MA20 is likely to cross over the long-term MA50 from above, consolidating the downtrend. However, as can be seen in two indicator windows, both RSI and Stochastic index have entered the oversold zone. Therefore, the down move seems limited.
Trade suggestion
Sell Stop at 4709.00, Take profit at 4673.50, Stop loss at 4730.00

CAC40

Fig: CAC 40 Index H4 Technical Chart
CAC40 index is trading round the support at 4500.00 and looks set to break below this level. Different from failed attempts in mid-November when the index was supported by the short-term MA20, the prices are under downward pressure from two MAs at the moment. Should the CAC40 breach the support level, it can attempt the next support at 50.0% retracement.
Trade suggestion
Sell Stop at 4490.00, Take profit at 4450.00, Stop loss at 4510.00

FSTE 100 Heads To One-Month Low, Weighed by Metal and Oil Producers

U.K. shares looked set to finish the week with every single session closing lower. The FTSE 100 index continued to slump on Friday, led by declines in commodity shares and stocks of oil producers.

The benchmark was heading toward its lowest settlement since mid-September with basic material, tech and energy shares experiencing the worst performances.

Oil producer BP PLC dropped 1.23% and Royal Dutch Shell PLC lost 1.86% on the back of weakening oil prices. Meanwhile, shares of diversified metals producers BHP Billiton PLC BLT and Rio Tinto PLC plunged by 3.88% and 2.66%, respectively.

Trade suggestion
Sell Stop at 6690.00, Take profit at 6650.00, Stop loss at 6720.00


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GBP/AUD signal by Capital Street FX

From GMT 06:30 02/12/2016
Till GMT 21:00 02/12/2016

Buy at 1.70500
Take profit at 1.71500
Stop loss at 1.70000

Mixed U.S. Jobs Report Helps Gold Rise For the First Time in Four Sessions

Gold futures turned higher on Friday, on track to rise for the first time in four sessions as the U.S. dollar on the back of a U.S. monthly jobs report.

Gold ticked up to around $1175.00 per ounce, paring their loss for the week after the U.S. government data showed that the economy added 178,000 new jobs in November with unemployment rate falling to a nine-year low in the month.

The U.S. dollar index, which measures the greenback against a half-dozen rivals, lost 0.28% to 100.68 on Friday, contributing to a weekly loss of roughly 0.8% as Friday’s jobs results were considered to be mixed. Although the jobless rate dropped to its lowest level since August 2007 at 4.6%, the labor force contracted by 226,000, sending the participation rate to 61.7 from 62.8 percent, the lowest since June. Additionally, wage growth declined 0.1% on a monthly basis, which is somewhat bullish for longer-term treasuries and negative for the dollar.

Trade suggestion
Buy Stop at 1175.00, Take profit at 1190.00, Stop loss at 1170.00

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Central Bank Policy Meetings To Dominate the Economic Calendar

The U.S. dollar fell broadly in the second-half of last week after hitting a 13-1/2 year high on Wednesday. The dollar index closed the week lower following consistent gains in the last three weeks. The gauge that measures the greenback against a half-dozen rivals lost 0.28% to 100.68 on Friday, contributing to a weekly loss of roughly 0.8% as Friday’s jobs results were considered to be mixed.

Although the jobless rate dropped to its lowest level since August 2007 at 4.6%, the labor force contracted by 226,000, sending the participation rate to 61.7 from 62.8 percent, the lowest since June. Additionally, wage growth declined 0.1% on a monthly basis, which is somewhat bullish for longer-term treasuries and negative for the dollar.

The Fed will almost certainly raise interest rates later this month but the chance of an early 2017 follow-up hike may have faded due to the subdued nonfarm payrolls report. Fed fund futures indicate a 100% chance of a hike at this mid-December meeting. However, the fact that the odds of another quarter-point move remains below 50% until June 2017 shows that investors expect a hike followed by a long pause.

In the week ahead, there are no major U.S. economic reports scheduled but the ISM non-manufacturing number. The Institute for Supply Management is scheduled to release its November’s result for the U.S. service sector activity on Monday. The index is expected to rise to 55.4 from October’s 54.8.

Besides, three Federal Reserve officials including Chicago Fed President William Dudley and St. Louis Fed head James Bullard are due to speak. Their remarks will be closely watched ahead of the upcoming Fed meeting on December 13-14th.

Nonetheless, what will dominate the economic calendar next week are central banks’ meetings. The ECB is to hold its final monetary policy meeting of 2016 on Thursday. No policy change is expected but the press conference with President Mario Draghi following the rate decision will be closely watched for clues over the ECB’s bond purchasing program which expires in March of next year.

The Bank of Canada is expected to hold rates steady at its meeting on Wednesday despite having said that the bank was actively considering cutting for the third time in two years in October. Data on Friday which showed the economy added 10,700 jobs in November and the jobless rate fell to 6.8%, indicated improving labour market.

The Canadian dollar gained ground for the second week against the greenback as OPEC ministers finally agreed to trim its output by million barrels per day. The deal is still contingent on the participation of non-OPEC nations like Russia, with analysts hoping for a production cut by 600,000 barrels a day.

Like the BOC and the ECB, the RBA is also anticipated to keep interest rates on hold at record lows of 1.5% at its meeting on Tuesday. Wednesday’s data on third quarter growth will follow with rate of growth being expected to slow slightly at 0.3% in the three months to September, after expanding by 0.5% during the second quarter.

EUR pairs gap down opening on Monday?

Analysts are comparing the Italy referendum with the UK referendum in June. What to expect on the market opening this Monday post the high impact event? Is the EUR pairs gap down opening a likely scenario?

3 December, AtoZForex – The political and economic fears tied to a “NO” vote for the Italian referendum, has a grip on the financial markets. It is not strange that the analysts are comparing the consequences of the Italian referendum with that of the UK’s EU vote in June. We all know the outcome of the Brexit vote and that is why EUR is currently enduring additional pressure.

It is clear that the event will increase market volatility. But what about the Forex brokers’ risk management ahead this event? To answer these queries of our readers, AtoZ Forex contacted all brokers. Including Capital Street FX, the broker has revealed its risk management ahead the referendum. Alongside, Capital Street FX’s research team provided their outlook of the market post the high impact event.

It is business as usual for Capital Street FX

Capital Street FX is working diligently with its Liquidity Providers and is happy to inform all readers and clients that there have been no changes to margins and leverage. Our spreads and execution also continue to maintain the high standards we set ourselves.

After the Brexit and US elections, what are the expectations for Italy’s referendum?

Capital Street FX’s research team: While there have been a succession of fat tail events such as the results of the Brexit vote and the US elections. We do believe that the chances of a win by the “Yes” camp currently appear unlikely. The markets expect a propagate a wave of uncertainty in the Italian system after a “No” vote. As the country works out its path ahead in the days after the Sunday referendum. Italian stocks and bonds are expected to continue their downward trend.

What are Capital Street FX’s expectations for EUR after Sunday?

Capital Street FX’s research team: Capital Street FX has been expecting the EUR to continue its downward trajectory, given the overall situation in Europe. Various EU members are due to hold elections in the coming 12 months. There is a distinct shift in the political system towards ultra nationalist, right-wing politicians and parties.

This distinct trend has the potential to ignite protectionist and nationalist sentiments, which can create further turbulence in the EU economy, as the Common Market struggles to encourage growth and employment, both of which continue to remain sluggish despite the ECB stimulus. We expect EURUSD to attempt a break of the 1.05 handle before the end of the year. Lastly, an attempt at parity can not be ruled out in Q1, 2017.

Possibility of EUR pairs gap down opening on Monday

Capital Street FX’s research team: The markets will be influenced by 3 key events – the Italian Referendum. The elections in Austria, and carry-over effects of the US NFP reading. While the first 2 events are being expected to create turbulence in European Stock Markets and Indices, and selling pressure in the EUR. The US NFP could carry the USD and US Equity Markets to new highs. Moreoever, there is a possibility of EUR pairs gap down opening on Monday.

How can Italy’s voting affect the ECB meeting on December 8th?

Capital Street FX’s research team: The ECB meeting on the 8th is expected to be a complex meeting. Given the prospects of turbulence in the Italian markets. Along with the political system in the country and mounting signs of distress in the Italian banking system. Also, a bailout for the Italian banking system could come up for discussion based on the the severity of the overall situation in Italy prior to the meeting.

An extension of the ECB stimulus program also looks likely due to the shocks emanating from Italy. Having said all the above, there is growing concern that the ECB has exhausted most of its tools to ignite growth and inflation in the Eurozone. Also, the ECB has not been very successful at it. It needs to balance the concerns of fiscal and monetary policy hawks with the need for populist economics. Which will be some balancing act, given the divergent situation in various EU countries.

What recommendations can Capital Street FX give to traders trading next week?

Capital Street FX’s research team: We expect the markets to be most affected by the Italian situation and the response of the ECB. Since the odds are stacked against Europe currently, staying light on European indices, banking stocks and bonds would be prudent. Also, the Dollar and US equities may continue to rally and buying dips in US equities and the USD would serve traders well.

Has Capital Street FX set up special communication lines for client enquiries?

Capital Street FX maintains a strong focus on client communication at all times. We are reachable at all times via live chat, email, skype and support tickets. All clients also have access to their account managers at all times. During key events such as the upcoming weekend, we ensure that clients have real-time access to their account managers as required. Current and New clients can get in touch with us at all times.

Daily Report on December 05, 2016


The euro declined on Monday after Italian Prime Minister Matteo Renzi said he would resign as his reforms, which aim at simplifying the legislative process, have been defeated in a referendum on Sunday. Renzi’s departure, which came on the heels of Britain’s shock vote to exit the European Union and Donald Trump’s unexpected victory, threats to embolden a renewed political and financial turmoil in Europe. The euro touched its weakest point in 20 months at $1.05048 in the early hours of Asian session.


Stocks also retreated with the MSCI Asia Pacific Index losing 0.4 percent. Japan’s Topix index, Australia’s S&P/ASX 200 Index, Korea’s Kospi 200 index and New Zealand’s S&P/NZX 50 Index all turned lower. Futures on the S&P 500 Index shed 0.3 percent while FTSE 100 Index futures edged 0.6 percent lower.
Chinese yuan and shares declined on Monday after Donald Trump took on the Chinese government via social media. The offshore yuan lost 0.2 percent to 6.8842 per dollar, its first loss in three days while the Shanghai Composite Index and the Hang Seng China Enterprises Index lost fell 1.2 percent, and 0.8 percent, respectively. Trump reiterated on his Twitter some of the grievances about China related to the country’s yuan devaluation and military complex building in the South China Sea.

Crude oil futures ticked lower on concerns that producers outside of OPEC will boost oil production on the back of rising prices. While Russia on Friday announced the highest average daily oil production in almost 30 years at 11.21 million bpd in November, U.S. energy firms were reported to extend drilling activities into a seventh month. Data from energy services firm Baker Hughes showed that the U.S. oil rig count rose by 3 rigs last week, sending the total amount of added oil rigs since its trough on May 27, 2016 to 161.

Technicals
EURUSD

Fig: EURUSD H4 Technical Chart
EURUSD has broken out of a trading range from 1.05700 to 1.06500. The pair has also crossed over two MAs, which suggesting a reversal into a downtrend. As can be observed from the Stochastic chart, the %K line and %D line are pointing downwards, indicating further decline.
Trade suggestion
Sell Stop at 1.05600, Take profit at 1.05000, Stop loss at 1.05900

AUDNZD

Fig: AUDNZD H4 Technical Chart
AUDNZD fell back below the 23.6% retracement at 1.04800 after failing to beat crossed over the long-term MA50. The slide has brought the market back to the bearish zone, as indicated by the RSI chart. The pair may retest a firm support at 1.04150 – the level that has restrained the price to fall lower for nearly a month.
Trade suggestion
Sell Stop at 1.04600, Take profit at 1.04150, Stop loss at 1.04800

WTI

Fig: WTI H4 Technical Chart
WTI scaled back after retesting a six-week high at 51.70. The rally which sent the market into the overbought territory finally lost its momentum. The %K line has penetrated the %D line from above, indicating a correction that may prompt the commodity to hit the support at 50.50.
Trade suggestion
Sell Stop at 51.10, Take profit at 50.50, Stop loss at 51.40

FTSE 100 Index

Fig: FTSR 100 Index H4 Technical Chart
FTSE 100 index has been on a slide since last Wednesday. Lower highs and lower lows have been formed on the price action, indicating a strengthening bearish momentum. The index pulled back from one-month low at 6676.55 last Friday but it had to give up its strength after the price hit the resistance at 23.6% Fib. level.
Trade suggestion
Sell Stop at 6700.00, Take profit at 6650.00, Stop loss at 6725.00

Cold Weather and PM Modi Spur Natural Gas Rally, But U.S. and Canada Fire Up Drilling Rigs

Natural gas futures turned higher on Monday after finishing lower last Friday. Following a correction as previous longs decided to book profits, the commodity prices, which is expected to be fueled by upcoming favorable weather, may extend their gains after a spectacular rally since November 9.

According to naturalgas.com, “a polar blast will invade the west-central U.S. the next few days with lows dropping into the single digits to teens, locally below zero. The eastern U.S. will warm early this week as weak high pressure builds in, although it will cool rapidly late in the week as polar arrives. A milder break will follow into the eastern U.S. next weekend into early the following week as cold reloads over the Northwest.” As temperatures continue to be cooler, natural gas demand may be increasing well above normal by mid-week and brings severe storage draws.

Meanwhile, also on the demand side, India was said to move forward a natural gas-based economy. Speaking in an energy conference on Monday, Indian Prime Minister Narendra Modi claimed that as natural gas is cheaper and less polluting fuel, his country will manage to raise local production of natural gas as well as create import infrastructure to meet the growing domestic demand.

On the supply side, the number of rigs targeting gas increased by one to 119 in the U.S. last week, said the Baker Hughes Industries last Friday. Meanwhile, the Canadian rig count also jumped last week with those drilling for gas adding by 20. Higher prices are encouraging more Canadian and American drillers get back to work, which causes a potential correction in the longer term despite bullish outlook in short-term.

Natural gas has been struggling around the highest level since October 18th at 3.544. The price is on the verge of breaking above the 0.0% Fibonacci level, which will also send the market into the overbought zone. As can be seen from the ADX chart, although the ADX index is soaring, +DI line is pointing downward, suggesting cautious bulls.

Trade suggestion
Buy Stop at 3.520, Take profit at 3.720, Stop loss at 3.420

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Brent Moves Past $55 Despite Threats From Non-OPEC Producers

Brent crude oil broke above $55-per-barrel threshold on Monday, trading at a 16-month high, as rising prospects of a tightening market after an OPEC output cap deal overshadowed concerns over mounting production from producers outside of the cartel.

The international oil benchmark hit an intra-day low at $55.32 per barrel thanks to OPEC sentiment that continued to give speculators impetus to increase bets on higher oil prices.

Mohammed Sanusi Barkindo, OPEC’s secretary general stated at an energy conference on Monday that oil demand in Asia is likely to keep on rising steadily. Demand from India alone is expected to jump to more than 10 million barrels per day (bpd) by 2040, from 4.1 million barrels per day now, said Barkindo.

Meanwhile, the potential output cut agreement between OPEC and Russia might not be as deep as initially anticipated. Moscow has agreed to slash its output by 300,000 bpd in early 2017 and planned to use its November oil production as its baseline for the cut. However, Russia’s average daily oil output in November was reported to reach its highest in almost 30 years at 11.21 million bpd, suggesting that the nation’s output will remain high even after a reduction.

Trade suggestion
Buy Stop at 55.00, Take profit at 55.80, Stop loss at 54.60

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AUD/JPY signal by Capital Street FX

From GMT 16:20 05/12/2016
Till GMT 21:00 05/12/2016

Buy at 80.500
Take profit at 86.300
Stop loss at 80.100

Daily Report on December 06, 2016

Asian stocks joined a global relief rally on Tuesday as investors brushed off the defeat of Italy’s constitutional referendum. U.S. equities closed higher yesterday with after the Dow Jones Industrial Average setting a fresh record high. The benchmark finished up 45.82 points, or 0.2%, at 19,216.24, a fresh record close following strong economic data.

A report from the Institute for Supply Management on Monday showed American services industries grew at the fastest pace in 13 months in November. The service side of the U.S. economy that employs about 80% of Americans rose to 57.2% last month from 54.8% in October, signaling that more businesses are expanding instead of contracting. Given the fact that most companies reporting business is steady, the case for a rate hike later this month has been continually strengthened.

Australia’s central bank kept interest rates unchanged earlier today, citing a global commodity upswing as a factor that boost national income. The Reserve Bank of Australia left the cash rate at 1.5 percent Tuesday as higher resource export prices ease the impact of a weaker economy at home where labor-market hiring relies heavily on part-time employment as participation falls.

As the U.S. Federal Reserve will almost certainly tighten its policy this month, Governor Philip Lowe can wait for his Australian dollar to be pushed down by a stronger greenback without further easing. A fall in local currency’s prices will aid Australia’s key service exports of education and tourism that are highly sensitive to the exchange rate. The RBA’s next policy meeting isn’t until February, when the bank will release its updated quarterly growth and inflation forecasts.

Technicals
EURUSD

Fig: EURUSD H4 Technical Chart
EURUSD resumed its upbeat moves following a consolidation at around 1.07600. The market returned to the bullish zone after the pair pulled back from the lowest level in one year at 1.05048. Coupled with support from two MAs, ADX is soaring with a divergence between the +DI and –DI lines, suggesting further advances.
Trade suggestion
Buy Stop at 1.07800, Take profit at 1.08500, Stop loss at 1.07400

USDCHF

Fig: H4 Technical Chart
USDCHF has been struggling around the support at 1.00600 after falling from as high as 1.01767. The price action has crossed over a couple of MAs from above, suggesting a reversal into a downtrend. While RSI is moving towards the oversold zone, ADX keep surging with a wide gap between +DI and –DI lines.
Trade suggestion
Sell Stop at 1.00500, Take profit at 0.99900, Stop loss at 0.99600

BRENT

Fig: BRENT H4 Technical Chart
Brent crude has been trading in an upward trading range which has been formed by higher highs and higher lows since early August. The commodity price has bounced back from the lower boundary at 47.39 and is heading upwards to the upper boundary. As RSI has neared the overbought zone, a pullback may occur when Brent crude hits the resistance.
Trade suggestion
Buy Stop at 54.90, Take profit at 55.70, Stop loss at 54.50

EURO 50

Fig: EURO 50 Index H4 Technical Chart
Euro 50 index has moved past the resistance at 3060.00 which it failed to break above yesterday. The index may edge higher to attempt the 50.0% Fibonacci retracement as RSI is pointing upwards while the short-term MA20 has converged with the long-term MA50 from below.
Trade suggestion
Buy Stop at 3070.00, Take profit at 3090.00, Stop loss at 3060.00