Daily Market Analysis by CapitalStreetFX

[CSFX.Support]

GBP/AUD signal by Capital Street FX

GBP/AUD signal by Capital Street FX

From GMT 08:00 03/10/2016
Till GMT 21:00 03/10/2016

Sell at 1.68400
Take profit at 1.67500
Stop loss at 1.69250

 

[CSFX.Support]

Daily Report on October 03, 2016

Daily Report on October 03, 2016



Asian stocks climbed on Monday as risk sentiment was boosted by easing of concerns about Deutsche Bank AG’s finances after the lender had been reported to negotiate a much lower settlement with the U.S Department of Justice than the initial claim. MSCI's broadest index of Asia-Pacific shares outside Japan inched 0.8% percent higher following its best quarterly performance since early 2012.

Brexit angst continued to weigh on the British Pound. The Sterling created a wide gap down on the opening after British Prime Minister Theresa May said on Sunday that she would trigger the process of negotiating the UK's exit from the EU by the end of March. The pair GBPUSD hit the lowest since August 16 at $1.29162 in early Asian trading in thin liquidity.

The Bank of Japan released its tankan survey of business sentiment, early on Monday. The survey indicated that large Japanese manufacturer sentiment remained flat in the past three months while non-manufacturing business sentiment slipped to its lowest in nearly two years. The gauge for confidence among big manufacturers stood at plus 6 in September, unchanged from three months ago. The index missed a median market forecast of plus 7.

Sentiment among large companies in the service sector hit the lowest level since December 2014 at plus 18, falling for three straight quarters as a result of typhoons and a slowdown in spending by foreign tourists stemming from a strong yen.

However, Japanese firms' appetite for capital spending remained resilient. Big firms plan to raise capital spending by 6.3 percent for this fiscal year, from year-before levels, basing their business plans on the assumption that the dollar would average 107.92 yen for the fiscal year through March 2017, down from 111.41 yen forecast three months ago.

Markets in China, Australia, Germany, Malaysia and South Korea are shut due to local holidays on Monday.



Technicals

USDJPY



Fig: USDJPY H4 Technical Chart

USDJPY has been moving in a thin range since it breached the resistance at 101.200 as the pair is facing strong resistance from the descending trendline connecting lower highs since the start of September. The long upper shadow of recent candles indicates attempts by buyers to push the price higher but sellers have jumped in every time and snapped any rally. With the %K line having crossed over the %D line from above, the pair may fall back below the 101.200 level.

Trade suggestion

Sell Stop at 101.150, take profit at 100.850, stop loss at 101.450



NZDUSD



Fig: NZDUSD H4 Technical Chart

NZDUSD has been moving sideways to lower since a steep slide on September 22. The pair is moving in the range between the support at 0.72200 and the resistance at 0.72900. As can be seen on the chart, lower lows and lower highs are being formed, indicating strengthening bears. Stochastic lines pointing down are consolidating the downtrend. The price action has broken below both the MA's which are now placed above the price action and adding further downside momentum.

Trade suggestion

Sell Stop at 0.72500, take profit at 0.72200, stop loss at 0.72900



CADJPY



Fig: CADJPY H4 Technical Chart

CADJPY has been on a rise since it rebounded from over four-year lows at 75.384. The two moving averages which acted as resistance through most of September have turned into dynamic supports that supported prices to reverse higher last Friday. The short-term MA20 has converged with the long-term MA50 from below, suggesting further up moves.

Trade suggestion

Buy Stop at 77.350, take profit at 77.825, stop loss at 77.000



GOLD



Fig: GOLD H4 Technical Chart

Gold has been trading sideways under the 23.6% retracement level at 1319.40 since it broke below this level on Friday. The yellow metal failed to surge above this handle in early Asian trading hours and had to retreat and head down towards the multi-month lows at 1302.00 recorded at the start of September. With the two MAs placed above the price action and RSI remaining below 50, Gold is expected to fall deeper.

Trade suggestion

Sell Stop at 1314.00, take profit at 1308.90, stop loss at 1320.00



WTI



Fig: WTI H4 Technical Chart

U.S crude prices seemed to resume the uptrend after a brief correction from one-month highs at 48.30. The wide gap between the short-term and long-term moving averages is widening, suggesting a strong uptrend, which has pushed the market to near the overbought zone. In the event of a continual up-move, the commodity is expected to pull back after hitting the resistance at 48.30.

Trade suggestion

Sell Limit at 48.30, take profit at 47.75, stop loss at 48.60



EURO50



Fig: EURO 50 H4 Technical Chart

Euro Stoxx 50 index opened the session with a small gap down after a strong rally on Friday. Since early September, lower lows have been created, suggesting a weakening of the bulls in the market. While the stochastic chart has neared the overbought zone, the RSI is still lingering around average level. The 38.2% level is within sights but this is not a firm support level considering recent price cycles. Traders may need to wait for more signals to enter a trade.

Trade suggestion

Buy Stop at 3016.50, take profit at 3060.00, stop loss at 3084.40

 

[CSFX.Support]

EURUSD Market Outlook by Capital Street FX

EURUSD Stuck In Thin Range After Friday’s Sharp Surge – Buyers Can Enter

The Euro has been trading sideways to higher in a thin range in early European trading hours on Monday. The pair surged nearly 1% on Friday in the wake of positive signs with regards to inflation growth, and Deutsche Bank’s settlement with the U.S DOJ in a case tied to its sale of mortgage-backed securities before the sub-prime financial crisis.

In a report published last Friday, Eurostat said consumer price inflation (CPI) in the euro zone ticked up by 0.4% in September, in line with forecasts and up from the final reading of a 0.2% advance in August.

Low crude prices continued to drag down inflation. Core CPI, which excludes food, energy, alcohol, and tobacco costs, rose by a seasonally adjusted 0.8% last month, unchanged compared to the previous month’s 0.8% increase but missing expectations for a 0.9% gain.

Europe’s headline CPI has been surging month after month since February but the core reading has remained under 1% for 6 months, which is far below the European central bank’s target of 2%. The ECB is scheduled to hold its next monetary policy meeting on October 20th. In its last meeting in September, the Bank decided to leave its rates and asset-buying program unchanged with no explicit guidance on future moves being indicated or published. Therefore, no changes are expected in the upcoming meeting.

Besides inflation readings, Deutsche Bank’s case has also clouded the EURUSD markets. Markets are still waiting for more news on the German lender after news agency Agence France-Presse reported that Deutsche was nearing a $5.4 billion settlement with the DOJ, well below the originally demanded amount.

The strong bullish momentum from Friday seems to be waning today, resulting in little change in the pair even after a series of EU manufacturing activity data readings were relased earlier today. Markit’s Manufacturing PMI for the euro zone, released earlier today, picked up to 52.6 last month. The survey showed that increasing demand from both within and outside the 28-member bloc boosted factory activity which prompted managers to accelerate hiring.

All sub-indexes namely output, new orders, new export business and employment improved, the report said. Among them, new orders jumped to 53.4 – the highest reading in the past year.

However, the upturn remained uneven among Eurozone’s members. While Germany, Austria and Netherlands recorded the highest growth rates, Spain, Italy and Ireland registered a slower pace of growth. Manufacturing in France and Greece continued to decline.

In the U.S, the Institute of Supply Management is scheduled to report on September manufacturing activity early U.S session today. The result is expected to swing back into expansion territory after unexpectedly falling below 50 in August.

Technical Analysis

Fig: EURUSD H4 technical Chart

EURUSD has been trading sideways in a 20-pip range above the support at 1.12200. The market is generally awash with positive and upbeat sentiment. The RSI index remains above 50. The short-term MA20 is likely to converge with the long-term MA50 from below suggesting further up moves. The price action has broken through both the MA’s from below and is comfortably placed above both MA’s.

Trade suggestion

Buy Stop at 1.12435, Stop loss at 1.12200, Take profit at 1.12700

 

[CSFX.Support]

Tesla Trade Idea by Capital Street FX

Tesla Reports Best Ever Quarterly Sales – Strong Future Guidance Makes Shares A Strong Buy

Shares of Tesla Motor Inc. soared strongly in the US morning session after the electric-car maker reported that its quarterly sales hit a record during the July through September period. The California-based company said 15,800 Model S sedans and 8,700 Model X sports-utility vehicles were delivered in the third quarter of 2016. Another 5,500 vehicles which were in transit to customers will be counted in fourth quarter results.

The auto-maker on Sunday reiterated strong guidance for the fourth quarter, and stated that sales and production during the fourth quarter shall be at levels similar to, or slightly better than the third quarter. In three months through September, Tesla produced 25,185 vehicles, which marked a 37% gain from the second quarter.

Tesla had previously stated that it expected to produce 50,000 vehicles in the second half of this year after missing projections by 30,000 vehicles during the first six months of the year.

Trade suggestion

Buy Stop at 213.00, Take profit at 215.60, Stop loss at 208.00

 

[CSFX.Support]

EUR/NZD signal by Capital Street FX

EUR/NZD signal by Capital Street FX

From GMT 07:20 04/10/2016
Till GMT 21:00 04/10/2016

Buy at 1.53600
Take profit at 1.54600
Stop loss at 1.52850

 

[CSFX.Support]

Daily Report on October 04, 2016 by Capital Street FX

Daily Report on October 04, 2016



The U.S dollar continued to strengthen against most of its peers, extending gains after the Institute for Supply Management (ISM) said on Monday that the purchasing managers index for the manufacturing sector rose to 51.5 in September from 49.4 the prior month. The gauge assesses confidence among mangers regarding manufacturing sector activity. The reading pointed to an expansion last month after shrinking in August.

In an interview on Bloomberg Television on Monday, Federal Reserve Bank of Cleveland President Loretta Mester stated that the case for a rate hike this year remained compelling and she expected that the target range for the benchmark federal funds rate would be raised as soon as November. Markets are not pricing too much of a change next month as the meeting is too close to the U.S. presidential elections.

Besides Fed Cleveland President Mester, New York Fed President William Dudley also spoke on Monday. Speaking at a private conference at the New York Fed, President Dudley expressed fears that the Fed would not have as much policy room as it did during the period of financial crisis to support the economy if the U.S fell into recession in the next few years. Hence, the central bank should be cautious about raising interest rates.

Australia’s central bank, led by new Governor Philip Lowe, kept the benchmark rate unchanged at a record-low of 1.5 percent at its monetary policy meeting earlier today. The bank cited an unexpected rebound in commodity prices as a boost to the economy, helping it to grow at an above-average pace. Additionally, the housing boom in Australia is an area of rising concern and the real estate sector is in a situation that may not be suitable for further cuts, especially when the unemployment rate is falling and international trading conditions are favourable for Australia.



Technicals

USDCHF



Fig: USDCHF H4 Technical Chart

USDCHF has been stuck in a range between the support at 0.96511 (which is also the 23.6% retracement level) and the resistance at 0.97400 since September 22nd. The pair rose above the two moving averages on Friday and the MA's have now become dynamic supports for the market. The price action is likely to make a breakout through the current range. As can be seen in the ADX chart, the ADX index has surged above 20, confirming a new uptrend after a period of moving sideways.

Trade suggestion

Buy Stop at 0.97500, Take profit at 0.97800, Stop loss at 0.97250



AUDUSD



Fig: AUDUSD H4 Technical Chart

AUDUSD is struggling around the 0.76730 level but is generally receiving support from the short-term MA20. The Aussie is expected to soar higher as the relative strength index continues to stay above the 50-line which separates the bullish territory from the bearish territory. Both MA's are currently placed below the price action and underpinning the market currently. The pair may test the high from Thursday at 0.77095.

Trade suggestion

Buy Stop at 0.76800, Take profit at 0.77095, Stop loss at 0.76600



EURCAD



Fig: EURCAD H4 Technical Chart

EURCAD has been moving sideways to lower since the start of the new month. The pair is currently under downward pressure from the two MAs which are placed above the price action and the downward sloping trendline that connects lower highs since September 27th. Both the MA's are currently placed above the price action.With the RSI indicating bearish sentiment, the pair is anticipated to fall further to the 23.6% level.

Trade suggestion

Sell Stop at 1.46900, Take profit at 1.46350, Stop loss at 1.47470



SILVER



Fig: SILVER H4 Technical Chart

Silver was moving sideways under the long-term MA50 in the first half of yesterday’s trading day and eventually failed to breach this resistance. Furthermore, silver fell out of the recent range between 19.265 and 18.960 to hit major support at 18.765. This is a major support zone that had contained the prices in mid-September. As the market has entered the oversold zone, buyers stepped in and pushed the price back up, which can be seen in long lower shadow in recent candles. Silver may have found a bottom and is likely to pull back.

Trade suggestion

Buy Stop at 18.960, Take profit at 19.265, Stop loss at 18.765



COPPER



Fig: COPPER H4 Technical Chart

Copper has broken below the two MA's which have now turned into new points of resistance after the price action crossed over from above yesterday. A sharp decline on Monday sent the market into the bearish zone, trimming the rally that reigned in the second half of September. The commodity may fall deeper with the support at 2.1640 within sight. A weak reading on the RSI is confirming the downward momentum.

Trade suggestion

Sell Stop at 2.1850, Take profit at 2.1640, Stop loss at 2.2050



Dow Jones



Fig: Dow Jones H4 Technical Chart

The Dow has been trading in a shrinking range for a month now, which has caused the RSI index to swing back and forth around the average line. The pair failed at the upper boundary of the recent range yesterday and fell back. The market may attempt a test of the lower boundary today, in case the retreat from yesterday continues. The %K line and %D line are heading downwards, suggesting a continuation of the downtrend.

Trade suggestion

Sell Stop at 18.220, Take profit at 18.100, Stop loss at 18.300

 

[CSFX.Support]

Natural Gas Market Outlook by Capital Street FX

Warmer Autumn Weather Cools Off Natural Gas – Selling Suggested

Natural gas prices have been trading sideways to lower since late September as stocks have continued to build slowly due to cooler Autumn weather, that has reduced demand for air conditioning, thereby reducing power consumption.

The weekly report from the U.S. Energy Information Administration on Thursday reported that inventories held in storage in the U.S. rose less than expected during the week ended September 23rd. The EIA said stockpiles rose by 49 billion cubic feet last week, to 3.6 trillion cubic feet, up 90 billion cubic feet from a year ago and 220 billion cubic feet above the five-year average.

Lower gas prices have discouraged drilling activity and caused production to start falling, while consumption has been hitting record levels. All these factors combined have boosted natural gas higher to reach the highest levels since January 2015. Gas demand for electricity generation has been consistently rising, as cheap gas and climate policy have encouraged power producers to replace old and inefficient coal-fired power plants with more efficient and cleaner gas-fired power plants.

Changing weather conditions have also played a part in altering the supply-demand dynamic. According to official data, temperatures across the most populated areas of the United States have been consistently above normal since the end of May, which has spurred higher than usual demand for air-conditioning usage this summer and caused prices to rise.

The summer demand has now neared an end and autumn is the time when traders usually bet on the strength of the heating market. As a result, warmer-than-average temperatures are likely to lower the heating demand usually witnessed at this time of the year. Monday’s weather updates have reported above-normal temperatures settling in across nearly the entire U.S for the next two weeks. With temperatures expected to be moderately above seasonal norms, it is understandable that traders have been on the sidelines and let prices trade sideways.

In the long run, the drilling downturn has shrunk the earlier supply surplus. Small weekly additions to gas stockpiles have caused the surplus over last year’s levels to decline to just 2.6% more than the stockpiles last year, and the surplus compared to the five-year average to drop to just 6.5% above the 5-year average, as on Sept. 23. All data is based on the U.S. Energy Information Administration report from Thursday.

Meanwhile, the winter of 2016/17 is forecast to be colder than the record warm winter of 2015/16, ensuring higher gas consumption for heating. With more gas-fired power plants scheduled to start up over the next 12 months, natural gas prices are expected to continue rising in the last quarter of 2016.

Technical Analysis

Fig: Natural Gas H4 Technical Chart

Natural Gas is trapped in a trading range between 2.875 and 2.935 after falling as much as 8.9% from the high at 3.165. Both the short-term and long-term MAs are placed above the price action and casting downward pressure on prices. The market may fall further towards the support zone at the 23.6% retracement level at 2.797 as the market currently remains gripped by bearish sentiment.

Trade suggestion

Sell Stop at 2.875, Stop loss at 2.935, Take profit at 2.797

 

[CSFX.Support]

Silver Trade Idea by Capital Street FX

Silver Loses Ground to An Unstoppable Dollar – Time To Go Short

Silver plunged to five-week lows at 18.448 on the back of a strengthening U.S dollar. The greenback reached fresh 31-year highs against the British pound amid concerns over renewed Brexit related uncertainty. In general, the U.S dollar index gained 0.5% rising across the board against most currencies.

Speaking in Charleston, West Virginia on Tuesday, Federal Reserve Bank of Richmond President Jeffrey Lacker expressed a strong desire for the central bank to raise interest rates soon to avoid risks from a likely pickup in inflation.

Lacker, who is not a voting member of the FOMC this year and has no direct influence on monetary policy currently, stated that “While inflation pressures may seem a distant and theoretical concern right now, prudent preemptive action can help us avoid the hard-to-predict emergence of a situation that requires more drastic action after the fact”.

Trade suggestion

Sell Stop at 18.470, Take profit at 18.300, Stop loss at 18.600

 

[CSFX.Support]

NZD/USD signal by Capital Street FX

NZD/USD signal by Capital Street FX

From GMT 07:50 05/10/2016

Till GMT 21:00 05/10/2016

Sell at 0.71750

Take profit at 0.71400

Stop loss at 0.72200

 

[CSFX.Support]

Daily Report on October 05, 2016 by Capital Street FX

Daily Report on October 05, 2016

Asian markets were mixed on Wednesday after U.S stocks closed lower on Tuesday as investors worried about uncertainties triggered by the leaving of the U.K from the European Union, upcoming U.S rate hikes and a tight race between presidential candidates ahead of the Nov. 8 election.

U.S equities extended losses to the second straight session. The Dow Jones fell 0.47 percent to finish at 18,168.45, the S&P 500 lost 0.5 percent to 2,150.49, and the Nasdaq Composite dropped 0.21 percent to 5,289.66. The equity markets are expected to focus their attention towards the upcoming third-quarter results from companies over the next few weeks.

The National Retail Federation on Tuesday forecast that U.S. consumers would boost this year’s holiday sales 3.6% higher. The retail industry group believed that the growth in employment rate and disposable income will help sales in November and December to reach $655.8 billion, out of which online sales are likely to contribute as much as $117 billion, reflecting a rise of 7 percent compared to the same period last year.

Oil prices rose in early trading on Wednesday after a report by the American Petroleum Institute (API) late on Tuesday showing that U.S. crude inventories likely fell for a fifth straight week, declining by 7.6 million barrels. The U.S. government's Energy Information Administration (EIA) will report official stockpile numbers later today.

The New Zealand dollar slumped after dairy product prices fell for the first time since July at the Global Dairy Trade auction. The GDT price index declined by 3 percent to US$2,880, down from US$2,975 at the previous auction two weeks ago.



Technicals

EURUSD



Fig: EURUSD H4 technical chart

EURUSD once again bounced back from the support at 1.11500, remaining stuck within the range between the lower boundary 1.11500 and the resistance at 1.12500. The price action has crossed over two MAs but long bodies in the last four candles suggested that aggressive moves may cause the bull to get exhausted soon and force the pair pull back at the major level 1.12500.

Trade suggestion

Sell Limit at 1.12500, Stop loss at 1.12800, Take profit at 1.11890.



USDJPY



Fig: USDJPY H4 technical chart

The US dollar is struggling under the 103.000 threshold against the Japanese Yen. The pair breached the resistance at 101.850 yesterday and kept surging strongly since then. Consistent rally sent the exchange rate to reach four-week highs and opened the chance for investors to take profit. The %K line which has crossed over the %D line in the overbought zone showed the weakening of bulls. Nonetheless, two MAs are heading upwards, suggesting a continual uptrend after a period of correction.

Trade suggestion

Buy Stop at 103.000, Stop loss at 102.500, Take profit at 103.500



AUDNZD



Fig: AUDNZD H4 technical chart

AUDNZD surged high to reach nearly one-month high at 1.06322. The pair has pulled back after hitting this level as can be seen in the RSI chart, buyers have outweighed sellers and sent market into the overbought zone. However, with ADX at high level at 33.19 and the divergence between the +DI and –DI line, the pair is expected to re-attempt the 38.2% level at 1.06538.

Trade suggestion

Buy Stop at 1.06300, Stop loss at 1.05800, Take profit at 1.06530.



BRENT



Fig: BRENT H4 technical chart

Brent is facing an important resistance at 51.45 – the highest level since August 18th. Small steps in early trade on Wednesday indicated the cautiousness of traders ahead of the new released later on the day. If the data come out in favour of an uptrend, a surge above this level may trigger buy stops. Otherwise, the commodity will have to reverse lower.

Trade suggestion

Buy Stop at 51.45, Stop loss at 50.95, Take profit at 52.00



COPPER



Fig: COPPER H4 technical chart

From the chart we can see that the short-term 20-period moving average has converged with the long-term 50-period MA above the price action, which confirmed the downtrend. The pair has fallen below the 38.2% level and is expected to plunge into the trading range between 2.1440 and 2.1640.

Trade suggestion

Sell Stop at 2.1640, Stop loss at 2.1800, Take profit at 2.1440



NASDAQ



Fig: NASDAQ H1 technical chart

U.S Nasdaq 100 index seems to be on the last stage of a double top pattern as prices have fallen below the neck level at around 4847.10. The pair pulled back on the ahead of market close yesterday but is likely to resume the downtrend on Wednesday after moving past both MAs. The short-term MA20 looks set to penetrate the long-term MA50 from above, while RSI stays below 50 line, suggesting overwhelming bears in the market.

Trade suggestion

Sell Stop at 4850.00, Stop loss at 4865.00, Take profit at 4817.80

 

[CSFX.Support]

Brent Crude Market Outlook by Capital Street FX

Oil In A Historic Rally As Supply Side Dominates – Can Prices Breach One-Year Highs?

Oil prices rose on Wednesday, prolonging their rally to a sixth consecutive trading day on the back of OPEC’s decision to snap output and falling U.S crude oil stocks. The Hurricane Matthew, which hit Haiti and Cuba on Tuesday and is now heading towards the U.S east coast, has wiped out the effect of a strengthening U.S dollar on oil prices.

U.S crude stockpiles are likely to record the fifth straight week of declines, after the weekly report from the American Petroleum Institute (API) late on Tuesday showed that U.S. inventories dropped by 7.6 million barrels. The U.S. government’s Energy Information Administration (EIA) will report official stockpile numbers later today, which are forecast to indicate an increase following weeks of drawdowns.

Venezuelan Oil Minister Eulogio Del Pino, in an e-mailed statement Tuesday, stated that an agreement to cap output among OPEC and non-OPEC oil producers could slash global supply by 1.2 million barrels a day. According to Minister Del Pino, besides the total amount of 700,000 bpd trimmed by OPEC’s members (the maximum agreed amount under the accord worked out last week in Algiers), non-OPEC states might reduce production by another 500,000 bpd. The deal could consequently boost oil prices by $10 to $15 a barrel above the average September price, he said.

As reported by a Bloomberg survey, OPEC output was at a record of 33.75 million bpd in September, up 170,000 bad compared to the previous month. The increase stemmed from the resumption of supplies from Libya and Nigeria, along with a ramp up in production from Iran.

The Iranian State news agency Islamic Republic News Agency reported on Sunday that Iran plans to increase exports to 2.35 million bpd in coming months from about 2.2 million bpd currently. The country aims to raise output to pre-sanction levels of 4 million bpd to regain market share. But market analysts said that in order to boost export capacity to 4 million bpd from the current level of nearly 3.7 million bpd, Iran would need more assistance in the form of foreign investment into its production infrastructure.

In the next formal meeting of OPEC members in November, non-OPEC oil producers such as Russia and Azerbaijan have also been invited to discuss output curbs. Russia, the world’s largest energy exporter, is widely expected to coordinate a meeting with Saudi Arabia, some time this month, to discuss oil production.

As stated by the U.S. National Hurricane Center, Hurricane Matthew is heading for the U.S. and may hit Florida’s Atlantic coast on Thursday/Friday. The storm is likely to reach the New York Harbor – the delivery point for NYMEX contracts, and may disrupt fuel shipments.

OIL Technical Analysis

Fig: BRENT D1 Technical Chart

After a period of time trading around the 23.6% level at 46.73, Brent crude sky-rocketed to move past both the moving averages, the psychological $50 mark, and a major resistance level at 51.45. The commodity is heading northwards to the highest levels seen since October 2015. The high at 52.82 recorded in June is the highest the market has traded since October 2015 and is a critical mark for the market, in its attempt to create a serious breakout for the medium/long term. The stochastic chart is currently indicating that the Brent market has stepped into the overbought zone. It shall be interesting to monitor the price action to evaluate whether the market can successfully aim for and break through the near term target at 52.82.

Trade suggestion

Buy Stop at 51.85, take profit at 52.82, stop loss at 51.00

 

[CSFX.Support]

SP500 Trade Idea by Capital Street FX

SP500 Recovers From Losses. Banks and Energy Companies Lead

U.S. stocks including Sp500 index ticked higher on Wednesday, paring losses suffered over the last two trading days, as rising oil prices and much-better-than-expected service sector data helped boost the energy and financial sectors higher.

Data from the Institute for Supply Management indicated that the U.S Non-Manufacturing PMI index jumped to 57.1 last month, which is significantly higher than the reading of 51.4 in August. The upbeat data raised expectations that the Federal Reserve will raise interest rates before the end of the year. Banking shares went up as higher interest rates improve banks’ revenue and profits.

Oil continued rallying today after the U.S. EIA reported another drawdown in domestic crude supplies. Contrasting with economist estimates calling for an increase in inventories, U.S oil stockpiles actually fell by 3 million barrels in the week ended Sept. 30.

The S&P 500 index has added 0.55% on the day, in trading thus far. Out of 11 sectors making up the index, gainers outnumbered losers by 7 to 4.

SP500 Trade suggestion
Buy Stop at 2162.00, Take profit at 2168.00, Stop loss at 2155.00

 

[CSFX.Support]

Daily Report on October 06, 2016 by Capital Street FX

Daily Report on October 06, 2016

Global stocks firmed on Thursday, buoyed by the rally in oil prices and stronger U.S economic data. MSCI's broadest index of Asia-Pacific shares outside Japan picked up 0.4 percent while Japan's Nikkei225 gained 0.5 percent. European markets also opened higher. Germany's DAX opened 0.4% higher at 10,624.77, and France's CAC 40 started the session 0.3% higher at 4,505.17. U.K's FTSE 100 and Stoxx Eurpe 600 added 0.1% and 0.2%, respectively.

Oil retreated in the early European session after extending its uptrend to the sixth consecutive day on Wednesday. Crude prices inched higher following U.S. government data that showed crude stockpiles fell unexpectedly for a fifth straight week.

The U.S. Energy Information Administration continued to surprise the market by reporting domestic crude supplies fell by 3 million barrels in the week ended Sept. 30th. Markets had expected an increase of two million barrels after four weeks of declines in a row.

Also on Wednesday, the ADP reported private-sector employment in the U.S only added 154,000 jobs last month, which is lower than 175,000 jobs added in August and marked the smallest increase since April.

In a separate report, the Institute for Supply Management said its services index shot up to the highest reading in 11 months at 57.1 in September from 51.4 in August. The gauge for the service sector published earlier by research group Markit also pointed to an improvement.

Finally, the Commerce Department rounded up an eventful day for the U.S with data on the country’s new orders for factory goods that indicated a slight increase in August. The manufacturing sector is showing signs of regaining some steam as orders for manufactured goods rose 0.2 percent after a downward revision to the july data. The july number was revised to 1.4 percent increase. The August reading was the second straight monthly increase following two months of weakness in May and June.



Technicals

USDCAD



Fig: USDCAD H1 technical chart

USDCAD had to give up its strength after failing to sustain the bullish momentum to break out of the resistance at 1.32000. The pair has generally been supported by the two MAs placed below the price action which has hardly let the pair fall too far below these two support levels. However, sellers seem strong as the %K line is moving a far way ahead of the %D line. USDCAD may extend the downtrend to re-attempt a test of the support at 1.31400.

Trade suggestion

Sell Stop at 1.31750, Take profit at 1.31400, Stop loss at 1.32100



AUDUSD



Fig: AUDUSD H4 technical chart

AUDUSD is on the path to complete the head and shoulders pattern after the pair breached the support at the 23.6% retracement level. Both MAs are still placed over the price action though the short term MA has crossed the long term MA from above. This is likely to create further downward pressure on the pair. With the market continuing to remain in a bearish setup, the pair is expected to fall further.

Trade suggestion

Sell Stop at 0.75880, Take profit at 0.75350, Stop loss at 0.76200



EURCHF



Fig: EURCHF H4 technical chart

EURCHF reversed higher from the 50.0% retracement level after collapsing to this level yesterday. The pair has received support from the short-term MA20 at 1.09151 and has bounced back from this zone and has also crossed over the long-term MA50 at 1.09291 from below. The Stochastics are indicating that the %K line has penetrated the %D line from below and is about to escape from the oversold zone, indicating a bounceback. The RSI index soaring above 50 is confirming the up move.

Trade suggestion

Buy Stop at 1.29350, Take profit at 1.09750, Stop loss at 1.09000



BRENT



Fig: BRENT H4 technical chart

Brent is experiencing some corrective moves after testing the 52.00 level yesterday. The commodity is expected to soon resume its uptrend as the %K line is much likely to reverse higher from near the oversold zone and cross over the %D line from below. The two MAs are placed below the price action and may boost the market to hit the highest level in one month at 52.82.

Trade suggestion

Buy Stop at 51.70, Take profit at 52.80, Stop loss at 51.00



Natural Gas



Fig: Natural Gas H4 technical chart

Natural Gas prices has been trading in an extremely thin range around 3.025. The price has entered a phase of consolidation following a sharp up move yesterday from the support at 2.935. The market is on the verge of beginning a continual uptrend as the moving averages are giving out signals supporting the upside. The short-term MA20 has converged with the long-term MA50 from south to north, and both are placed below the price action.

Trade suggestion

Buy Stop at 3.035, Take profit at 3.075, Stop loss at 3.000



FTSE



Fig: FTSE H1 technical chart

FTSE has been trading sideways to lower since the index reversed lower from the all-time record highs at 7128.75. While the RSI has dropped into the bearish territory, FTSE is finding support from the dynamic support that is the long-term MA50. In the event that the price action crosses over the MA50 from above, the support at 6954.79 may be the target.

Trade suggestion

Sell Stop at 7011.00, Take profit at 6955.00, Stop loss at 7056.00

 

[CSFX.Support]

EUR/JPY by Capital Street FX

EUR/JPY by Capital Street FX

From GMT 07:30 06/10/2016

Till GMT 21:00 06/10/2016

Buy at 116.100

Take profit at 116.600

Stop loss at 115.600

 

[CSFX.Support]

Twitter Trade Idea by Capital Street FX

Twitter Waging A Lonely Battle To Survive As Potential Buyers Back Off – Short Positions Suggested

Shares of Twitter Inc. fell around 17% in pre-market trading on Thursday, after nose-diving nearly 10% on Wednesday. The stock has run into rough weather after deep-pocketed buyers seem to be aborting attempts to bid for the social media company.

Without naming any sources, technology news website Recode reported on Wednesday that Google isn’t interested in buying Twitter. Unfortunately, Apple Inc. and Walt Disney Co. were also reported (again citing unnamed sources) to not have any plans to make a bid for the social communications company.

With the departure of Google, Disney and Apple, Salesforce is believed to be the only potential buyer for Twitter for now. However, the company has never confirmed publicly that it wants to go after Twitter. Salesforce CEO Marc Benioff appeared on CNBC on Wednesday and refused to comment directly on the Twitter case.

Trade suggestion

Sell Stop at 20.70, Stop loss at 22.00, Take profit at 18.00

 

[CSFX.Support]

Copper Market Outlook by Capital Street FX

Copper Sells Off Along With Other Metals – Chinese Support Missing

Copper continued to trade lower on Thursday, heading towards a lower finish for every trading session in the week thus far. Upbeat data from the U.S. services sector boosted the dollar, while holidays in China squeezed liquidity and trading volume in the market.

Copper prices have lost nearly 3% since the start of this week amid thin volume as Chinese markets are closed. The absence of Chinese traders due to the Golden Week holiday left the industrial metal market vulnerable to currency moves. As a result, dollar-denominated commodities including copper have been weighed down by a stronger dollar.

The U.S dollar held on to its strength as expectations over a rate hike this December are getting stronger after a spate of positive reports released recently. Further supporting the case for a rate hike is the rally in oil that started since the informal meeting between OPEC members which brought about an agreement on an output ceiling. A rise in oil prices is expected to help the Federal Reserve to partly solve its concern over U.S inflation, as higher energy prices bring about a trickle down effect through higher prices across the economy.

The Fed delayed its plans on raising rates in September, considering an economy that was growing unevenly, and low consumer prices. The central bank does not expect the personal consumption expenditure index (the bank’s favorite gauge for inflation) to hit the 2% target until 2018. However, given a rise in oil prices that will boost general costs across the economy, U.S inflation is forecast to reach 2.3% next year, the IMF said.

Markets have already turned their attention to the monthly U.S. payrolls report on Friday. The median forecast from economists is calling for an increase of 175,000 in the number of new jobs created in September. Strong jobs data is considered a sign of a strengthening economy, and will cement the case for a rate increase, especially after a spate of positive reports released recently.

One more factor contributing to the strength of the greenback is that U.S stocks ticked lower today. Perceived as a safe haven asset, investors has been flocking into the currency as cautiousness ahead of Friday’s jobs data is holding investment off risky assets.

The general strength in the US dollar coupled with across the board selling in metals including gold and silver has brought about significant weakness in the Copper market. This trend is expected to continue should the NFP data deliver a strong reading tomorrow as rising interest rates are expected to throttle the run-away demand for commodities by increasing the costs of borrowing for industrial and infrastructural projects which are a major source of industrial demand for base metals such as Copper.

COPPER Technical Analysis

Copper has fallen back into the congested trading range that has contained prices during mid-late September. However, the decisive down moves seen recently suggest that prices could break out of this range soon. The support at the 50.0% Fibonacci retracement level looks likely to be retested. As we are close to the weekend and the Chinese market is coming back next week, it is not certain that the price could decisively breach this level. The RSI is also nearing the oversold zone and therefore the market could witness a period of quiet despite the fact that both MA’s are currently placed above the price action.

Trade suggestion

Sell Stop at 2.1440, Take profit at 2.1320, Stop loss at 2.1580

 

[CSFX.Support]

Daily Report on October 07, 2016 by Capital Street FX

Daily Report on October 07, 2016



Asian shares fell on Friday after U.S stocks ended flat yesterday as investors act cautiously ahead of the monthly U.S Payrolls Data which will be released later today. Data on the number of new jobs added, the unemployment rate and average hourly earnings are considered as one of the keys to assess the possibility of a Fed interest rate hike at the end of this year.

The MSCI Asia Pacific Index shed 0.4 percent. New Zealand’s S&P/NZX 50 Index slipped to its lowest since July and Hong Kong’s Hang Seng Index retreated from four-week highs. The British Pound was on the path to recovery following a collapse in early Asian trade. Sterling plunged to around $1.20000 after French President Francois Hollande stated that the U.K had to suffer the consequences of a departure from the single market, otherwise, other countries would follow Britain and attempt to leave the EU.

Explaining the freefall in the market, traders supposed that it was largely due to computer-driven orders that triggered and exacerbated the plunge, especially when the market was in a period of low liquidity. No matter what the cause, sterling recorded the biggest loss among major currencies versus the U.S dollar and the steepest one-day decline since the June referendum.

Besides the closely watched jobs data, a number of Fed officials including Cleveland Fed President Loretta Mester and Fed Vice Chairman Stanley Fischer are scheduled to speak later today. The second presidential debate between Hillary Clinton and Donald Trump will take place on Sunday. The US markets shall be closed on account of the Columbus Day holiday on Monday.



Technicals

EURCAD



Fig: EURCAD H4 Technical Chart

EURCAD has been on a steady decline after consistently failed attempts to breach the key resistance at 1.48000. The pair may continue to slide deeper as the RSI is pointing downwards to the oversold zone. The short-term MA20 has just crossed the long-term MA50 from above further consolidating the downtrend towards the 23.6% retracement level. The price action broke through both the MA's from above previously and both MA's are now placed above the price action.

Trade suggestion

Sell Stop at 1.47100, Take profit at 1.46650, Stop loss at 1.47200



EURUSD



Fig: EURUSD D1 Technical Chart

EURUSD is about to break out of the shrinking trading range within which it has been stuck for five months. The pair is likely to make a breakout to the downside and could be headed towards the 50.0% retracement level at 1.10572. With the short-term MA20 converging with the long-term MA50 from north to south, and the RSI falling to as low as 37.45, the downtrend is confirmed.

Trade suggestion

Sell Stop at 1.11100, Take profit at 1.10600, Stop loss at 1.11400



USDJPY



Fig: USDJPY H4 Technical Chart

USDJPY has neared the last cycle’s high at 104.300 and may form a double bottom pattern if the pair can surpass this level. The uptrend has been supported strongly as the price action has crossed through both the MA's from below, while the RSI index has soared as high as 64.59. The next key resistance to test is the 23.6% retracement level.

Trade suggestion

Buy Stop at 104.100, Take profit at 105.000, Stop loss at 103.000



SILVER


Fig: SILVER D1 Technical Chart

Silver is set to post the biggest one-week loss since April 2003. From near the 23.6% Fibonacci retracement level, the metal has consistently broken through two more major supports at the 38.2% and 50.0% levels, and has consequently fallen into the oversold territory. Silver is expected to trade in a thin range before being affected by the fundamental side. In case of an overwhelming bearish force, the metal may hit the 61.8% support level. The RSI and the ADX are both indicating a sideways to lower move for the moment.

Trade suggestion

Sell Stop at 17.100, Take profit at 16.600, Stop loss at 17.600



WTI



Fig: WTI D1 Technical Chart

WTI crude prices have surged more than 17% since it rebounded from the support at 43.00. The rally has brought the commodity near the overbought zone and the price is attempting to retest the resistance at 51.65, which is also the highest since July 2015. The ADX has soared to a reading of 40.76, suggesting a strong uptrend. The RSI is near the overbought zone but not quite there yet suggesting room for some further up-moves.

Trade suggestion

Buy Stop at 50.60, Take profit at 51.60, Stop loss at 49.40



SP500



Fig: SP500 H4 Technical Chart

The SP500 has been trading sideways within a narrowing range. As can been from the ADX chart where the index has retreated to as low as 13.91, no clear trend is being formed in the market. The RSI is swinging back and forth around the 50 line, suggesting consistent whipsaw action in the price moves. With the job data coming out later today, the index can break out in either direction.

Trade suggestion

Sell Stop at 2148.50, Take profit at 2126.65, Stop loss at 2163.00

 

[CSFX.Support]

GBP/AUD signal by Capital Street FX

GBP/AUD signal by Capital Street FX

From GMT 09:25 07/10/2016
Till GMT 21:00 07/10/2016

Sell at 1.62650
Take profit at 1.60000
Stop loss at 1.64700

 

[CSFX.Support]

SP500 Trade Idea by Capital Street FX

SP500 Falls After Non-Farm Report as December Rate Hike Remains On Course

SP500 index tumbled on Friday after the September jobs data proved that the U.S economy is strong enough for a rate hike by the end of this year, even though the results were not as good as expected.

According the Labor Department, there were 156,000 jobs added in September, with unemployment rate rising to 5% from 4.9% as more Americans entered the labour market looking for work.

Commenting on the non-farm report, Cleveland Federal Reserve President Loretta Mester said that the economy is at full employment and therefore gradual rate hikes are needed.

With the same point of view as Cleveland Fed President Mester, Federal Reserve Vice Chairman Stanley Fischer said that the result was strong enough to reflect an economy that is moving ahead but not too fast to pose risks.

At the time of writing, 10 out of 11 sectors of the SP500 index were trading in the red. Industrials and Materials sectors led the decline, dropping 1.48% and 1.97%, respectively.

Trade suggestion

Sell Stop at 2147.00, Stop loss at 2152.00, Take profit at 2140.00

 

[CSFX.Support]

FTSE Market Outlook by Capital Street FX

Supported by Crashing GBP, FTSE Stable Above 7000.00 – Traders May Consider Buying

The U.K’s FTSE 100 swung between gains and losses in early European trading hours as the Sterling remained weak after a flash crash in early Asian trade. In a rather odd turn of events, a plunge in the British Pound has supported the FTSE in staying above the 7000.00 level since Tuesday.

The Cable was in a freefall at the start of the Asian session. Fears over potentially tough negotiations between the U.K and the European Union on the departure of the UK from the EU, triggered the selloff as automated sell stop orders were hit in a thin market. Sterling consequently plunged to around $1.20000 before bouncing back to around $1.24771 from where the currency again reversed lower and resumed its move downwards.

A weak pound is typically considered to be beneficial to the FTSE 100 index as many of its constituents generate a large part of their revenues abroad. A fall in the value of the pound against other major currencies means overseas revenues are worth more when they are converted back into sterling.

With most of their revenues generated in U.S dollars, mining companies were among the biggest gainers on the London Stock Exchange, on Friday. At the time of writing, Anglo American rose 2.76%, BHP Billiton PLC added 2.8%, and Rio Tinto PLC gained 2.02%. Also leading the way higher in London, Glencore Plc added 2.33%, gold miner Randgold Resources climbed 2.9% while shares of Mexico-based precious metals mining company Fresnillo PLC jumped 2.79%.

HSBC Holdings PLC also helped the FTSE higher with shares putting on 2.35%. Most of the HSBC group’s business is located outside the U.K. With a major part of its operations also based in the U.S, the bank stands to benefit from a financial environment of rising interest rates in the US.

While exporters have benefited from the fall in sterling, importers’ stocks fell off as their costs will be burdened by the exchange rate. EasyJet shares lost 4.71% so far, extending its losses from Thursday’s session when the stock was down by 6.9%. The airline said on Thursday that its full-year profit would drop as much as 29% due to terrorist attacks that slowed bookings and a plunging Sterling. Shares of International Consolidated Airlines Group PLC, parent of British Airways, also fell 3.0%.

Markets are now focusing on the monthly U.S Payrolls Data which will be released later today. Data on the number of new jobs added, the unemployment rate and average hourly earnings are considered as one of the keys to assess the possibility of a Fed interest rate hike at the end of this year. A strong report will boost the U.S dollar and further dampen the Sterling which will in turn support the FTSE index.

Technicals Analysis

Fig: FTSE 100 index technical chart

Since the day the index surpassed the 7000.00 threshold, FTSE has traded in a thin range between this major level, which has turned into a firm support, and the resistance around 7122.00. Recent swings in the price have prevented the market back from entering the overbought range as two way trading has helped stabilize indicators. The two MAs are still placed below the price action, thereby consolidating the up moves.

Trade suggestion

Buy Stop at 7070.00, Stop loss at 6990.00, take profit at 7120.00