Daily Technical Analysis by Capital Street FX

Cold Weather and Supply Decline Send Natural Gas to 2-year High

Natural gas futures dropped due to profit-taking on Thursday after having surged to the highest price in two years yesterday. The rally came amid expectations over a tightening market.

The January natural gas futures contract, which expired Wednesday, gained 4.5 percent to reach the highest since December 2014 at $3.990 per million British thermal units before settling at $3.930 per mBtu. The new front-month contract for February also soared sharply.

While latest weather forecasts showed a blast of cold air next month which will help boost demand, investors are expecting data from the Energy Information Administration due later today will indicate a big drawdown in supply last week. Economists anticipated natural gas storage in the U.S. to contract by about 220 billion cubic feet of gas for the week ended Dec. 23.

If confirmed, gas in storage would reach 3.375 trillion cubic feet, which would be more than 10 percent below last year’s level.

Trade suggestion
Buy Stop at 3.850, Take profit at 3.950, Stop loss at 3.800

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AUD/NZD signal by Capital Street FX

From GMT 07:00 29/12/2016
Till GMT 21:00 29/12/2016

Sell at 1.03750
Take profit at 1.03400
Stop loss at 1.03900

Weak Dollar Pushes Gold To Levels Not Seen in Two Weeks

Gold futures soared more than 1% on Thursday, aiming to extending its advance for a fourth-straight trading day. The precious metal reached a two-week high as the U.S. dollar retreated after a downbeat economic data.

Gold futures for February delivery jumped 1.25% to trade at $1158.47 an ounce in light volume. This is the level not seen since December 14th. The dollar index dropped 0.55% to 102.66.

According to data released by the Commerce Department on Thursday, the U.S. trade deficit climbed 5.5% last month to a seasonally adjusted annual $65.3 billion. November’s reading was larger than the $62.5 billion gap forecast by economists. Particularly, exports increased 1.0% to $121.7 billion while imports advanced 1.2% compared to those of October.

As most gold is priced in dollars, a weaker greenback makes the precious metal less expensive for other currency holders, presumably raising demand.

Trade suggestion
Buy Stop at 1158.00, Take profit at 1165.00, Stop loss at 1150.00

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Cold Weather and Supply Decline Send Natural Gas to 2-year High

Natural gas futures dropped due to profit-taking on Thursday after having surged to the highest price in two years yesterday. The rally came amid expectations over a tightening market.

The January natural gas futures contract, which expired Wednesday, gained 4.5 percent to reach the highest since December 2014 at $3.990 per million British thermal units before settling at $3.930 per mBtu. The new front-month contract for February also soared sharply.

While latest weather forecasts showed a blast of cold air next month which will help boost demand, investors are expecting data from the Energy Information Administration due later today will indicate a big drawdown in supply last week. Economists anticipated natural gas storage in the U.S. to contract by about 220 billion cubic feet of gas for the week ended Dec. 23.

If confirmed, gas in storage would reach 3.375 trillion cubic feet, which would be more than 10 percent below last year’s level.

Trade suggestion
Buy Stop at 3.850, Take profit at 3.950, Stop loss at 3.800

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USD/CHF signal by Capital Street FX

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

Buy at 1.02000
Take profit at 1.02400
Stop loss at 1.01800

EUR/USD signal by Capital Street FX

From GMT 08:30 30/12/2016
Till GMT 21:00 30/12/2016

Buy at 1.05200
Take profit at 1.05700
Stop loss at 1.05000

Daily Report on December 30, 2016

Global stocks were set to close a tumultuous year with mixed notes on Friday. While Japanese equities and European Stoxx Europe 600 Index looked set to have their first annual decline in five years, the MSCI Asia Pacific Index is about to record its first annual gain since 2013. China was at risks of marking one of the worst performances with the Shanghai Composite Index on course for a yearly decline of 12 percent.
The Euro surged sharply in early Asia trading hours on Friday, jumping from around $1.0490 to trade above $1.0700 in a blink. This is its highest level in two weeks after being stuck in a range from $1.0370 to $1.0480. According to market analysts, the steep up move wasn’t likely driven by any specific fundamental news, but partly due to a broad dollar selling as traders closed their book ahead of the New Year holiday.
In the currency market, the greenback was broadly lower against its rivals. The dollar index, which tracks the greenback against a basket of its major peers, dropped more than 0.6 percent to 102.03, paring its annual gain to 3.8 percent after reaching a 14-year high of 103.65 on Dec. 20.
Crude futures made fractional gains on Friday, following data from the U.S. Energy Information Administration that showed smaller-than-expected growth in U.S. crude inventories last week. EIA stated that U.S. crude stockpiles added 614,000 barrels in the week ended Dec. 23, far below the 4.2-million barrels increase reported by the industry group American Petroleum Institute. However, the figure still contrasted with a 1.2-million barrel contraction forecast by analysts.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in February traded at $54.00 a barrel, up 0.43%, in the Globex electronic session. Brent crude on London’s ICE Futures exchange ticked 0.37% higher to $57.06 a barrel. Oil trading remained tepid ahead of the New Year holiday. Global oil markets will be closed Monday.

Technicals
EURGBP

Fig: EURGBP H4 Technical Chart
EURGBP has been riding an uptrend. The pair spiked to as high as 0.86686 – the highest level since November 15th, before paring its gains and falling back to the support at 0.85800. Buyers are still dominating on the market but it seems hard for the pair to reach today’s high or set another record settlement. Therefore, it much more likely for set a target at 0.86300 in the event of continual up moves.
Trade suggestion
Buy Limit at 0.85800, Take profit at 0.86300, Stop loss at 0.85500

USDZAR

Fig: USDZAR H4 Technical Chart
USDZAR has been under downward pressure created by the short-term MA20 which forced the pair to reversed lower after hitting this dynamic resistance at 13.79900. RSI has also reversed lower, indicating the emergence of bearish force.
Trade suggestion
Sell Stop at 13.66000, Take profit at 13.55000, Stop loss at 13.71000

BRENT

Fig: Brent H1 Technical Chart
Brent crude has been trapped in a trading range between the resistance at 57.20 and the support at 56.60. The price action has twisted with a couple of short-term and long-term MAs. The commodity may fall lower given the fact that RSI has fallen below the central line.
Trade suggestion
Sell Stop at 56.90, Take profit at 56.60, Stop loss at 57.00

COFFEE

Fig: Coffee H1 Technical Chart
Coffee pulled back from the support at 61.8% Fibonacci level after failing to break out of the long-term 50-hour moving average. The commodity price now faces the dynamic resistance again and is expected to cross over this stance to surge higher, as RSI index indicates an overwhelming bullish force in the market.
Trade suggestion
Buy Stop at 137.00, Take profit at 138.80, Stop loss at 136.00

GBP/JPY signal by Capital Street FX

From GMT 16:00 30/12/2016
Till GMT 21:00 30/12/2016

Sell at 144.100
Take profit at 143.500
Stop loss at 144.400

Daily Report on January 03, 2017

Asian shares started the new year with a positive note on Tuesday, buoyed by confidence stemming from European equities which surged to the highest in a year on Monday. All of Asia's major markets along with Britain and Switzerland in Europe and the U.S. and Canada closed for the New Year holiday yesterday, leaving trade in other parts of the euro zone thin and volatile. Germany's DAX gained 0.9 percent to its highest in nearly 17 months while France's CAC soared 0.5 percent to a 13-month peak.
Solid factory growth in China and Europe gave the global manufacturing sector a fresh boost at the start of 2017. Data from a private business survey showed China's factory activity rose more than expected last month. Thanks to accelerating demand and soaring output, the Caixin/Markit Manufacturing Purchasing Managers' index (PMI) picked up in December, rising to 51.9, from 50.9 in the previous month. The reading hit the strongest level since January 2013.
MSCI's broadest index of Asia-Pacific shares outside Japan jumped rose 0.4 percent after finishing 2016 3.7 percent higher, recording its best year in four. Japanese market remained closed for an extended New Year holiday. The best performers in the region are Australian shares which saw the S&P/ASX 200 Index added 1.2 percent, advancing for the third time in four trading days. Hong Kong's Hang Seng and China’s CSI 300 index and the Shanghai Composite were all higher.
The People's bank of China (PBOC) on Tuesday nearly doubled the number of foreign currencies in a basket used to set the renminbi's value. From the first trading day of 2017, the central bank increased the number of currencies in the CFETS basket to 24 from 13, in an attempt to make the yuan index less influenced by moves in the U.S. dollar. After this change, the nominal dollar weighting in the new basket is reduced by 4 percent.

Technicals
GBPJPY

Fig: GBPJPY H4 Technical Chart
GBPJPY has breached the resistance at 144.500 level after moving sideways around this handle since last Friday. The price action has crossed over the moving averages, suggesting a reversal into a new uptrend. The RSI and ADX is soaring, not to mention a wide gap between the +DI and –DI line. The pair may soar higher to attempt another resistance at 145.500.
Trade suggestion
Buy Stop at 144.900, Take profit at 145.500, Stop loss at 144.600

USDJPY

Fig: USDJPY H4 Technical Chart
The pair USDJPY has broken out of a thin trading range to witness a strong up move in the first trading day of the new year. Buyers are supporting the dollar to break the 117.800 level again. Both indicators are confirming the strong bullish force which is dominating in the market. The pair is expected to retest the high at 118.600.
Trade suggestion
Buy Stop at 118.000, Take profit at 118.600, Stop loss at 117.700

WTI

Fig: WTI H4 Technical Chart
Although the crude price has been trading in a thin range around the key level 54.00, it has been supported by a couple of moving average. Indeed, the U.S. oil price pulled back after hitting the short-term MA20 at 53.89. RSI continued to edging higher, supporting further advances.
Trade suggestion
Buy Stop at 54.30, Take profit at 55.00, Stop loss at 53.90

CAC40 Index

Fig: CAC40 Index H4 Technical Chart
France’s CAC40 index opened Tuesday session with a gap up, extending its strong gains to the second day. The stock benchmark ended 10 days of trading in a thin range, sending the market into a fresh uptrend. The ADX index has soared above 20, confirming the upmove. A soaring RSI and a divergence between the +DI and –DI lines also indicate overwhelming buyers in the market.
Trade suggestion
Buy Stop at 4905.00, Take profit at 4945.00, Stop loss at 4885.00

AUD/JPY signal by Capital Street FX

From GMT 07:20 03/01/2017
Till GMT 21:00 03/01/2017

Buy at 85.000
Take profit at 85.500
Stop loss at 84.750

Dollar Marches To 15-year Highs, Supporting USDCHF to Edge Higher

The U.S. dollar continued to strengthen on Tuesday, after closing 3.6% higher in 2016. The dollar index recorded its fourth straight year of gains and extended its bullish momentum to the first trading day of 2017.

The pair USDCHF added 0.54% to trade at 1.0294, contributing to lift the dollar index to its highest level in 15 years. The gauge of the greenback’s strength against other 6 major currencies jumped 1.1% to 103.31 – the level not seen since December 2002, according to FactSet data.

The gains on Tuesday continued to be buoyed by the momentum seen in late 2016 with expectations that President-elect Donald Trump will boost fiscal spending and reform taxes in an attempt to reinforce the U.S. economy.

Trade suggestion
Buy Stop at 1.03000, Take profit at 1.03400, Stop loss at 1.02800

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Warmer Weather Forecasts Send Natural Gas to Severe Loss

U.S. natural gas futures plummeted steeply on Tuesday, witnessing the biggest single-session percentage loss in nearly two year. The price continued to trade lower on Wednesday, weighed down by forecasts for warmer weather through the first two weeks of January
Natural gas for February delivery lost nearly 0.7% to $3.299 a million British thermal units on the New York Mercantile Exchange. The commodity dropped 11.25% in the first trading session of 2017.

Latest weather forecasts indicated the arctic blast may be briefer than many anticipated, with milder temperatures taking hold in mid-January. Mild weather will bring an end to a string of mammoth withdrawals of natural gas from storage which started last December.

Trade suggestion
Sell Stop at 3.290, Take profit at 3.190, Stop loss at 3.340

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NZD/JPY signal by Capital Street FX

From GMT 06:45 04/01/2016
Till GMT 21:00 04/01/2016

Buy at 81.70000
Take profit at 81.76000
Stop loss at 81.69700

Consumer Discretionary Fuels SP500 Higher, Fed’s Minutes Awaited

U.S. stocks rose ahead of the release of the Federal Reserve’s December meeting minutes on Wednesday. The benchmark S&P500 added 0.55% to 2270.35 with gains led by consumer discretionary stocks.

Investors are waiting for the Fed’s minutes for its latest meeting when it decided to raise rate for just the second time in a decade. As the central bank is expected to accelerate its rate-hike speed in 2017, markets will be scrutinizing the bank’s viewpoint about President-elect Donald Trump’s pledge of fiscal stimulus.

The S&P 500 witnessed 9 out of 11 sectors trading higher, with consumer discretionary topping the market. While stocks of consumer discretionary contributed to a rise of 1.62%, telecommunications and energy were riding a decline.

Trade suggestion
Buy Stop at 2270.00, Take profit at 2277.00, Stop loss at 2265.00

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Daily Report on January 04, 2017

Asian stocks extended gains on Wednesday with Japanese equities ticking higher on the first trading day of 2017. Japan’s Topix index gained more than 2.4%, reaching the highest in more than a year while Nikkei 225 Stock Average also took off, rising 2.51% to settle at 19,594.16. Both two benchmarks recorded the best first day of trading since 2013.

Meanwhile, the Stoxx Europe 600 Index shed 0.2% to 365.04 as 11:20 GMT on Wednesday after closing at the highest level since Dec. 2015 on Tuesday. Banking shares were trading in a positive territory but failed to offset losses caused by retailers. Shares of Next PLC led declines, tumbling more than 11% after the U.K. fashion retailer cut its annual profit forecast and warned on a difficult year ahead.

On the data front, the European Union's statistics agency on Wednesday said its consumer prices rose at the fastest annual rate in more than three years last month. The pickup in the overall measure of the Eurozone’s inflation stemmed from a rise in energy charges, which sent the index to 1.1% higher in December from 0.6% in November. However, the core rate – which excludes prices of items such as energy and food – advanced only 0.9%, triggering caution for the European Central Bank that the sharp rise in inflation may be unstable.

Crude prices recovered from a big loss a day prior on expectations U.S. crude oil stockpiles will contract last week. The contract for Brent crude futures hit a fresh 18-month high in the previous session but could not sustain the bullish momentum and fell on the back of a strong dollar. The benchmark settled at $55.47 per barrel. U.S. West Texas Intermediate (WTI) crude futures were trading at $52.53 per barrel, not far from the last settlement. According to analysts polled by Reuters, weekly U.S. statistics on oil stocks due on Thursday are expected to show a 1.7 million barrel draw.

Technicals
AUDCAD
AUDCAD

Fig: AUDCAD H4 Technical Chart
AUDCAD failed to break above the 61.8% Fibonacci retracement at 0.97330 to reverse lower. The price action not only crossed over both the long-term and short-term moving averages but also breached the support at 0.96900. The pair is heading for a six-month low at 0.96000.
Trade suggestion
Buy Digital Put Option from 0.96600 to 0.96000 valid until 20:00 GMT January 04, 2017

NZDJPY

Fig: NZDJPY H1 Technical Chart
NZDJPY pulled back from the 50.0% Fibonacci support at 81.550 where it also faced the long-term MA50. Spurred by bullish sentiment from both the fixed and dynamic supports, the pair ticked higher, attempting to retest the resistance at 82.000. RSI has rebounded from the 50-line, confirming further advances.
Trade suggestion
Buy Digital Call Option from 81.600 to 82.000 valid until 20:00 GMT January 04, 2017

SILVER

Fig: SILVER H1 Technical Chart
Silver has been moving indecisively below the firm resistance at 16.450 level. As can be observed from recent candles, most of them have extremely thin bodies and long shadows, suggesting that the metal is struggling to find direction. However, silver has also been supported by the MAs and parabolic sar, which may send the price to the 61.8% Fib. level.
Trade suggestion
Buy Digital Call Option from 16.450 to 16.550 valid until 20:00 GMT January 04, 2017

COFFEE

Fig: Coffee H4 Technical Chart
Coffee has been riding a bull run since it rebounded from the 61.8% Fibonacci retracement at 135.65. The up moves has not only sent the price action above the long-term 50-period moving average but also brought the market into the bullish zone, as indicated by the RSI chart. The 50.0% level is within the sight.
Trade suggestion
Buy Digital Call Option from 141.00 to 144.00 valid until 20:00 GMT January 04, 2017

Daily Report on January 05, 2017

Asian shares advanced for an eighth consecutive day on Thursday, mirroring gains on Wall Street overnight. The MSCI Asia Pacific Index rose 0.8 percent to a three-week high with Australia and Hong Kong leading gains. The Hang Seng added 1.2%, looking set for the highest level since Dec. 14. While Australia’s S&P/ASX 200 Index gained 0.4 percent. On the contrary, Japan's Nikkei shed 0.3 percent as the yen edged up on the dollar.

The greenback fell after the minutes of the Dec. 13-14 meeting of the Federal Open Market Committee had been released in Washington on Wednesday. According to the minutes, almost all officials indicated that the prospects for fiscal stimulus under President-elect Trump’s administration could boost economic growth in the coming years. However, it still remained unchanged about “how such changes might alter the economic outlook”, the minutes said.

At the meeting, members highlighted the potential of higher inflation thanks to stronger economic growth and further increases in oil prices, which may require a more aggressive rate-hike path. Nonetheless, some officials stated that a stronger dollar could continue to offset rise in inflation. Most on the committee reiterated that a “gradual” pace of rate hikes over the coming years would likely remain appropriate.

Crude prices saw a rebound overnight following weekly data by American Petroleum Institute (API) that showed U.S. crude inventories fell 7.4 million barrels to 482.7 million in the week ended Dec. 30. The reading was far above analyst expectations for a decrease of 2.2 million barrels.

Elsewhere, China’s services sector was reported to accelerated to a 17-month high last month. The nation’s Markit/Caixin services purchasing managers' index (PMI) ticked higher to 53.4 in December on a seasonally adjusted basis from 53.1 in November, adding evidences to views that China is starting the new year with stronger momentum.

Technicals
EURCHF

Fig: EURCHF H4 Technical Chart
EURCHF extended its bull run after pulling back from the support at 1.06800. The price action has penetrated both the long-term and short-term MAs from below and is heading upwards to a strong resistance at 23.6% Fibonacci level. Coupled with the RSI index that is edging higher, parabolic sar which moving below the price action also supports further advances.
Trade suggestion
Buy Stop at 1.07350, Take profit at 1.07550, Stop loss at 1.07250

GBPJPY

Fig: GBPJPY H4 Technical Chart
GBPJPY has fallen sharply to test the support at 142.500 and is expected to break below this level. The last time the pair failed to breach this handle is on December 29th when the market was on the verge of falling into the oversold zone. This time, there is room for further declines with RSI at 34.34. -DI line is soaring higher, signaling a strong bearish momentum.
Trade suggestion
Sell Stop at 142.500, Take profit at 141.000, Stop loss at 143.500

SILVER

Fig: SILVER H4 Technical Chart
Silver has been on an uptrend for three-straight trading days. Steady up moves have brought the price above the 61.8% Fibonacci level and sent the silver market into the overbought zone. As can be seen from the chart, the grey metal has fallen into a correction but chances for the rally to resume stay strong.
Trade suggestion
Buy Stop at 16.650, Take profit at 16.850, Stop loss at 16.550.

DAX 30 Index

Fig: DAX 30 H1 Technical Chart
DAX 30 index rebounded from a firm support at 11540.00 which also prevented the price from falling further yesterday. The price action has move past the moving averages and is heading towards the resistance at 11650.00. RSI has crossed over the central line, confirming the uptrend.
Trade suggestion
Buy Stop at 11600.00, Take profit at 11650.00, Stop loss at 11570.00

EUR/USD signal by Capital Street FX

From GMT 06:00 05/01/2017
Till GMT 21:00 05/01/2017

Buy at 1.05500
Take profit at 1.05900
Stop loss at 1.05300

Selling USD – Not Enough To Defend Weak Peso Weighed By Trump

Mexican peso rebounded after posting a record low at 21.624 per dollar on Wednesday as Mexico’s central bank sold dollars in Mexico and New York on Thursday to prop up the currency.

According to market sources, the central bank sold at least $1 billion in U.S. currency in morning trade in an attempt to fight off the peso’s steep down rally to record lows amid fears U.S. President-elect Donald Trump’s protectionist policies could further hurt Latin America’s second-biggest economy. The bank kept the amount confidential.
Last year, the peso was among the world’s worst performing currencies after having dropped around 20% in the wake of Trump’s presidential victory. The Mexico’s central bank had to intervene in the forex market by selling $2 billion to rescue the sinking peso. Nonetheless, the intervention was short-lived and the currency continued to trend lower.

The central bank sold at least $1 billion in U.S. currency in morning trade. The bank kept the amount confidential. The dollar sales mark the bank’s first currency intervention since February 2016, when it sold $2 billion to prop up the sinking peso. The peso depreciated 20 percent last year alone and was among the world’s worst performing currencies.

This time, the peso decline is expected to extend as Trump is putting pressure on U.S. companies to not build factory in Mexico. In a tweet on Thursday, the Trump threatened Toyota Motor Corp with a “big border tax” if it builds a new factory in Mexico to manufacture cars for the U.S. market.

Trade suggestion
Buy Limit at 21.25000, Take profit at 21.60000, Stop loss at 21.00000

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EUR/AUD signal by Capital Street FX

From GMT 06:00 06/01/2017
Till GMT 21:00 06/01/2017

Buy at 1.40350
Take profit at 1.41000
Stop loss at 1.40000

Upbeat NFP Pushes Dow Jones To 20,000 Threshold

U.S. shares turned higher on Friday following a December U.S. jobs report that was interpreted as generally positive. The benchmark Dow Jones Industrial Average inched closer to the psychologically important 20,000 level.

According to monthly data from the U.S. Bureau of Labor Statistics, the economy added 156,000 jobs last month. Although the heading figure was much below the consensus of 180,000 jobs forecast by the economists, the reading for November was revised sharply upwards. In addition, worker pay rose at the fastest pace since the Great Recession at the rate of 0.4% in December.

Annual gain in 2016 jumped to 2.9% – the fastest increase since a recovery that began in mid-2009. Meanwhile, the unemployment rate climbed to 4.7% from 4.6% as more people entered the labor force in search of work.

Trade suggestion
Buy Stop at 20,000, Take profit at 20,100, Stop loss at 19,050

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