Daily Market Analysis by CapitalStreetFX

[CSFX.Support]

Daily Report on December 09, 2016 by Capital Street FX


Daily Report on December 09, 2016



Global shares continued to trade in a positive territory on Friday with European stocks climbing towards their best week since February. European shares advanced for a fifth session after the European Central Bank decided to extend its quantitative-easing program until the end of 2017. The Stoxx Europe 600 Index rose 0.3%, U.K. benchmark FTSE 100 added 0.14%, and France’s CAC 40 gained 0.20% while Germany’s DAX 30 retreated.

According to a statement in Frankfurt on Thursday, the Governing Council will increase its asset-buying program to exceed 2.2 trillion euros ($2.4 trillion). The central bank will continue to purchase assets after the initial expiry date in March but the month speed from April will be reduced to 60 billion euros ($65 billion) a month from 80 billion euros currently. The bank also stated that it can step up or prolong purchases if needed.

Oil rose a second day ahead a meeting this weekend in Vienna between the Organization of Petroleum Exporting Countries and 14 other nations. As stated by a government official familiar with the matter, Russia may fulfill its pledge to cut output by as much as 300,000 barrels a day if OPEC follows through on its commitment to curb production.

Elsewhere, China’s producer price index and consumer price index both came in above expectations on Friday. The reading from the National Bureau of Statistics for factory-gate inflation rose to the highest since late 2011. The PPI jumped 3.3% in November from a year earlier with prices in the mining industry surging 14.8%. Consumer prices picked up 2.3 percent on rising food costs which added 4 percent in the month.



Technicals

USDJPY



Fig: USDJPY H4 Technical Chart

USDJPY continued to swing back and forth around the 61.8% Fibonacci level at 114.113. In general, the pair has been supported by a couple of two moving averages. Bullish force remains dominating the bearish one, as stated by the RSI index which is surging higher. The pair may attempt the resistance at 116.00.

Trade suggestion

Buy Stop at 114.800, Take profit at 116.00, Stop loss at 114.200



EURGBP



Fig: EURGBP H4 Technical Chart

EURGBP has been on a sharp rise after a volatile trading yesterday. The pair broke out of a consolidation before rising as high as 0.85718 on Thursday. However, EURGBP quickly lost its bullish steam and fell off below the 0.84600 support. With two MAs hanging above the price action and a RSI that heading downwards, the pair is expected to hit the support at 0.83700.

Trade suggestion

Sell Stop at 0.84100, Take profit at 0.83700, Stop loss at 0.84300.



WTI



Fig: WTI H4 Technical Chart

U.S. crude sustained its rally from one-week low at 49.60 thanks to a boost from the long-term MA50. The advance has sent the price above the short-term MA20. The RSI index is pointing upwards after moving past the 50 line. The crude price may retest the high at 52.30 in the event of continual upbeat moves.

Trade suggestion

Buy Stop at 51.50, Take profit at 52.30, Stop loss at 51.10



FTSE 100



Fig: FSTE 100 Index H4 Technical Chart

FTSE 100 index has fallen into a correction following a sharp advance that brought the index above the 6920.00 resistance. A correction is resulted from an overblown market. As can be observed from the RSI indicator window, the index has just retreated from the overbought zone. In case of continual gain, the index may hit the 7,000.00 threshold.

Trade suggestion

Buy Stop at 6950.00, Take profit at 7000.00, Stop loss at 6920.00

 

[CSFX.Support]

Crude Oil To Open Higher, Focus on Fed and Yellen’s Remarks

Crude Oil To Open Higher, Focus on Fed and Yellen’s Remarks

U.S. stock market closed higher on Friday, after having set a string of record highs since the victory of the President-elect Donald Trump who pledged to bolster the world’s largest economy by increasing infrastructure spending, lowering taxes and loosening regulations.

At the close in NYSE on Friday, the Dow Jones Industrial Average gained 0.72% to hit a new all-time high at 19777.00, S&P 500 index climbed 0.59% to finish at 2259.54 while the NASDAQ Composite index gained 0.50%.

Coupled with a raft of pro-business policies by Trump, the broad-based rally was also supported by upbeat economic data. The University of Michigan’s report on consumer sentiment, a gauge of confidence in the economy, rose to 98.0 in December. The reading was just one-tenth of a percent from a cycle high recorded in 2015, which was the highest since 2004.

For the next week, investors will be looking at clues from the U.S. Federal Reserve on how aggressive the central bank will hike rate next year amidst little doubt that the Fed will raise interest rates for the first time in a year on Wednesday. The Fed remains the sold central bank that is considering tightening its monetary policies against the background where others are mulling over more easing or keeping policy steady for a long period of time.

While markets are pricing in a near 100 percent chance for a quarter percentage point increase at Fed’s final meeting of 2016, President Janet Yellen’s guidance on a timetable for future tightening is eagerly expected when the U.S. central bank meets next week.

On the data front, major reports from the U.S. will come out on Wednesday and Thursday. The U.S. is to release data on retail sales on Wednesday. Retail sales are forecast to have advanced by 0.3% in November after a larger than expected 0.8% increase in October. A chain of data, including reports on consumer prices, jobless claims and manufacturing activity in both the Philadelphia and New York regions will be published on Thursday.

Additionally on Thursday, investors will also be focusing on a news conference U.S. President-elect Donald Trump for any hints about his economic policy plans.

Besides the Fed, the Bank of England and the Swiss National Bank are two other banks that are expected to keep its key rate steady at their policy-setting meetings on Thursday.

The euro dropped to as low as 1.05300 on Friday before paring some losses to close at 1.05551. The European Central Bank extended its asset purchases, albeit at a slower pace, on Thursday. Considering uncertainties from both inside and outside the 28-nation bloc namely Brexit, the U.S. election and the Italian referendum, the ECB decided to expand its quantitative-easing program to exceed 2.2 trillion euros ($2.4 trillion) by the end of 2017. However, the monthly pace will be reduced to 60 billion euros ($65 billion) a month from 80 billion euros currently.

According to the statement, the Governing Council may “increase the program in terms of size and/or duration” if the outlook becomes less favorable or if financial conditions become inconsistent with further progress toward a sustained adjustment of the path of inflation”.

The Canadian dollar, on the other hand, rose steeply on the back of the rebound in oil prices and the fact that the Bank of Canada left rates unchanged last Wednesday.

Crude prices are expected to start next week with a sharp jump after producers from outside the OPEC agreed to reduce output following a production cut deal by the 13-country group. Another 558,000 bpd will be slashed from global supplies after OPEC agreed to trim its production by 1.2 million barrels per day from Jan. 1. Top exporter Saudi Arabia had pledged to reduce as much as 486,000 bpd and may cut even deeper, Saudi oil minister Khalid al-Falih said after Saturday’s meeting.

Top non-OPEC producer, Russia, will cut 300,000 bpd.

 

[CSFX.Support]

Daily Report on December 12, 2016 by Capital Street FX


Daily Report on December 12, 2016



Asian shares were mostly lower on Monday even though energy stocks were fueled by rising oil prices. The MSCI Asia Pacific Index dropped 0.4 percent, with Chinese markets tumbling the most. Coupled with worsening concern about the outlook for the property market, Shenzhen shares lost 4.9 percent also due to the fact that the nation’s insurance regulator banned some insurers from further investing in stocks, which spurred selling. The Shanghai Composite Index shed 2.4 percent while Hong Kong’s Hang Seng Index was off 1.4 percent.

Crude prices shot up by more than 4% to their highest level since 2015 after OPEC and non-OPEC producers reached their first deal since 2001 to jointly reduce output. Over the last weekend, producers from outside OPEC including the world’s top producer Russia, agreed to reduce output by 558,000 bpd. Although the deal was short of the initial target of 600,000 bpd but it still remains the largest contribution by non-OPEC ever.

Before that, the 13-nation cartel had signed an agreement to slash output by 1.2 million bpd from January 1st. Top exporter Saudi Arabia pledged to cut around 486,000 bpd to just below 10.1 million. Russia said it would gradually cut 300,000 bpd.

Japan’s Cabinet office data released on Monday showed that the country’s October core machinery orders rose for the first time in three months. Core orders, a highly volatile data series regarded as an indicator of capital spending in the coming six to nine months were reported to soar 4.1 percent on a monthly basis in October, beating the economists' median estimate of a 1.0 percent increase.



Technicals

GBPCHF



Fig: GBPCHF H4 Technical Chart

GBPCHF has been trading sideways to higher since last Thursday. The pair has been supported by two moving averages that are hanging below the price action. However, as can be observed from last candles, long upper shadows show bulls were not strong enough to sustain its bullish momentum but bears were too weak to reverse the price direction. With RSI pointing upwards and a divergence between the +DI and –DI lines, the pair is expected to tick up.

Trade suggestion

Buy Stop at 1.28300, Take profit at 1.28800, Stop loss at 1.28000



AUDCAD



Fig: AUDCAD H4 Technical Chart

AUDCAD has fallen below the 0.98000 threshold for the first time since early-September. The pair is moving in a sideways around 0.97807 as RSI has neared the oversold zone. The price may fall deeper to test the 61.8% support as bullish momentum is suppressed by two MAs lingering above the price action.

Trade suggestion

Sell Stop at 0.97800, Take profit at 0.97400, Stop loss at 0.98000



Sugar



Fig: Sugar H4 Technical Chart

Sugar resumed its down moves following a correction that brought the metal to as high as 19.81. The price action penetrated the short-term MA20 from above again and is approaching the 38.2% Fibonacci support at 18.75. As RSI remains below 50, sugar is anticipated to extend its losses.

Trade suggestion

Sell Stop at 19.20, Take profit at 18.75, Stop loss at 19.40.



SILVER



Fig: SILVER H4 Technical Chart

Silver has been on a decline since it reversed lower from the resistance at 17.200. The metal continued to broke below the support at 16.850 after crossing over the short-term MA20 at 16.941. Silver is struggling around the long-term MA50 at 16.738. RSI has fallen below the 50 line for the first time since early December, indicating a strengthening bearish force.

Trade suggestion

Sell Stop at 16.730, Take profit at 16.550, Stop loss at 16.850.

 

[CSFX.Support]

Copper Market Outlook by Capital Street FX

Copper Edges Higher on China’s Upbeat PPI and Goldman Sachs Forecasts

Copper futures opened higher on Monday, jumping by nearly 1.2% compared to the last close before paring some gains to trade around 1.26670. The rally in early Asian trading hours was spurred by last week’s strong Chinese economic figures and latest market outlook by Goldman Sachs which pointed to a more “bullish” environment for the metal next year.

According to the National Bureau of Statistics, producer prices in China, the world’s top metals consumer, rose to its highest level in five years in November in the wake of rising industrial commodities. China’s producer price inflation advanced 1.2% on a monthly basis and 3.3% year on year last month, the fastest pace since late 2011. Upbeat readings for other areas such as the United States and Europe also contributed to copper’s demand outlook.

In a note dated on Sunday, Goldman Sachs stated that “The improvement in demand growth was much stronger than we had anticipated and appears likely to absorb much of the ‘wall of supply’ that we had expected would drive prices lower during 2H16 and early 2017,”. Therefore, the supply-demand balances for the commodity may become more bullish at least to mid-2017.

The investment bank forecast a copper deficit of around 180,000 tons for 2017, contrasting to earlier estimates of a 360,000-tonne supply surplus. The metal’s price for the next three months, six months, and 12 months were also anticipated higher to $5,800, $6,200 and $5,600 a tonne, respectively from $5,000, $4,800 and $4,800.

Fig: COPPER H4 Technical Chart

Copper seemed to have broken out of the 38.2% resistance at 2.6660 but the metal failed to sustain its bullish strength. The price action has been moving in a shrinking range formed by higher lows and lower highs. The prices reversed lower after hitting the upper boundary and are about to face a couple of moving averages. The short-term MA20 is expected to be a solid support that will sends the price higher.

Trade suggestion

Buy Limit at 2.6600, Take profit at 2.6800, Stop loss at 2.6500

 

[CSFX.Support]

GBP/AUD signal by Capital Street FX

From GMT 11:00 12/12/2016
Till GMT 21:00 12/12/2016

Sell at 1.68300
Take profit at 1.67700
Stop loss at 1.68600

 

[CSFX.Support]

Natural Gas Trade Idea By Capital Street FX

Updates on Warmer Weather Snap Natural Gas’ Rally

Natural gas prices plummeted on Monday, weighed down by concerns that warmer weather indicated by latest forecasts may curb demand for the commodity.

Natural gas for January delivery hit an intra-day low at $3.471 a million British thermal units on the New York Mercantile Exchange, down nearly 7% compared with the last close. Prices had surged consistently in the last four weeks to reach the highest levels in two years thanks to weather forecasts that showed below-average temperatures this winter after an unusually warm autumn.

However, according to updates released over the weekend, temperatures are anticipated to not be as cold as previously expected, with warmer-than-typical temperatures across the eastern U.S.

Trade suggestion

Sell Stop at 3.550, Take profit at 3.470, Stop loss at 3.590

 

[CSFX.Support]

Daily Report on December 13, 2016 by Capital Street FX

Daily Report on December 13, 2016



Asian shares were mixed on Tuesday after paring some losses in early trade. The MSCI Asia Pacific Index rallied 0.3 percent with gains in Japan’s equities and Chinese stocks offset declines in markets of Australia and New Zealand. In Tokyo, the Topix Index closed 0.6 percent higher following an earlier decline of 0.6 percent. The yen reversed lower against the greenback, dropping by 0.3 percent to 115.380 per dollar. Australia’s S&P/ASX 200 Index and New Zealand’s S&P/NZX 50 Index closed down 0.3 percent and 0.4 percent, respectively.

The Shanghai Composite Index trade up 0.1 percent on Monday, rebounding from earlier losses after China’s official data showed stronger-than-expected industrial output and retail sales, which helps boost Chinese regulators’ confidence to curb financial risks by some methods including pushing money market rates higher and curbing leveraged purchases of both stocks and bonds.

Industrial production was reported to jump 6.2 percent from a year earlier in November while retail sales rose 10.8 percent last month. The country has posted its strongest retail sales growth of the year which was led by sales of household electronics, communication appliances and office supplies. Online sales also witnessed a strong advance in November thanks to China’s annual online shopping bonanza Singles’ Day on Nov. 11.

The International Energy Agency on Tuesday reported that OPEC’s crude oil output in November rose by 300,000 barrels per day compared to that of October. The production of the 13-nation cartel reached, a record high of 34.2 million barrels a day, according to the IEA’s its closely watched monthly report. Of that, Saudi Arabia pumped at a record 10.63 million barrels a day in November, up 70,000 barrels a day from the previous month.



Technicals

EURCHF



Fig: EURCHF H4 Technical Chart

EURCHF had to give up its bullish strength after a consolidation around 1.07850. The pair retreated after hitting the short-term MA20 and is struggling at the 23.6% Fibonacci retracement. A RSI index heading to the oversold zone and a stochastic chart that showed both %K line and %D line are heading downwards are indicating a strengthening bearish momentum which can send the price lower.

Trade suggestion

Sell Stop at 1.07500, Take profit at 1.07200, Stop loss at 1.07650



GOLD



Fig: GOLD H4 Technical Chart

Gold reversed lower following a correction yesterday. The precious metal once again broke below the 1160.00 support as the rally could not stand the heat from two MAs that are lingering above the price action. RSI remains in the bearish area and is pointing downwards. Additionally, the –DI and +DI lines are creating a widening gap, suggesting that the metal may attempt the support at 1150.00.

Trade suggestion

Sell Stop at 1157.00, Take profit at 1150.00, Stop loss at 1160.00



WTI



Fig: WTI H4 Technical Chart

U.S. crude oil has rebounded from the support at 52.30 – the level has played an important part as a firm resistance for the price. Oil price failed to break out of the resistance at 54.00 yesterday after a strong surge sent the market into the oversold zone. With RSI heading upwards, the commodity is expected to retest the 54.00 level.

Trade suggestion

Buy Stop at 53.10, Take profit at 54.00, Stop loss at 52.70



NASDAQ 100



Fig: NASDAQ 100 Index H4 Technical Chart

U.S. benchmark NASDAQ 100 futures opened today’s session with a small jump and is trading around the 4800.00 threshold. The index looks set to attempt the all-time high level logged on October 25th at 4923.58 with supports from a soaring RSI and the convergence between the %K line and the %D line of the stochastic chart.

Trade suggestion

Buy Stop at 4885.00, Take profit at 4920.00, Stop loss at 4870.00

 

[CSFX.Support]

FTSE Market Outlook by Capital Street FX

Bank Shares Overshadow Weak Mining Sector, Powering FTSE 100 Index

U.K. shares turned higher on Monday thanks to gains in banking stocks that outweighed declines in mining shares.

The advance of London-listed banks’ equities was bolstered by upbeat sentiment from other European counterparts, after Italy’s largest bank by assets, UniCredit SpA UCG said on Tuesday it planned to cut jobs further and sell its assets in order to reinforce its capital base. In addition to the job cuts that had already been planned, UniCredit is about to cut another 6,500 jobs by 2019, bringing total reductions to 14,000, or 10% of its workforce.

The bank, which has a market capitalization of just under EUR15 billion, stated to launch a EUR13 billion ($13.8 billion) rights issue by the end of March and shed EUR17.7 billion of gross bad loans by bundling them into securities to be sold to investors.

Shares of Lloyds Banking Group added1.38%, Standard Charterer gained 1.04% while Barclays PLC moved up 0.53%. Royal Bank Of Scotland Group also picked up 0.4% and HSBC Holdings PLC ticked 0.92% higher.

However, mining shares capped the index’s rally today as metals prices fell on the back of a stronger U.S. dollar. Antofagasta PLC fell 2.26%, Rio Tinto PLC lost 2.01% and BHP Billiton PLC shed 0.96%. Precious metals producer Fresnillo PLC and Randgold Resources PLC were on a decline in the wake of sliding gold prices.

On the economic data front, the Office for National Statistics reported that the U.K.’s annual inflation climbed to its highest annual rate in more than two years. The CPI index rose to 1.2% in November, the highest rate since October 2014. The Bank of England is scheduled to release its last policy decision of 2016 on Thursday, with markets widely expecting that the bank will keep its key interest rate unchanged at 0.25%.

Fig: FTSE 100 Index H4 Technical Chart

The U.K.’s benchmark rebounded from nearly one-week low at 6868.00 and has broken above the resistance at 6920.00. The bullish momentum has been powered by the short-term MA20 which helped the index reverse higher on Tuesday. As indicated by the RSI that is heading to the overbought zone, the FTSE 100 index may surge higher to retest the 7000.00 threshold.

Trade suggestion

Buy Stop at 6930.00, Take profit at 7000.00, Stop loss at 6900.00

 

[CSFX.Support]

AUD/USD signal by Capital Street FX

From GMT 07:00 13/12/2016
Till GMT 21:00 13/12/2016

Sell at 0.74800
Take profit at 0.74500
Stop loss at 0.74950

 

[CSFX.Support]

Dow Jones Trade Idea by Capital Street FX

Dow Jones Sets New Record, Attempting 20,000 Threshold

U.S. shares set a new round of intraday records on Tuesday with Dow Jones Industrial Average nearing the 20,000 milestone ahead of the Federal Reserve’s two-day meeting stating today.

The benchmark jumped more than 0.6 percent to 19,940, heading for a seventh-straight session of gains. The rally was led by shares of International Business Machines Corp., Nike Inc. and Apple Inc. which rose more or less than 2 percent each. Indeed, at the time of writing, International Business Machines Corp. added 2.37%, Nike Inc. gained 1.85% and Apple Inc. climbed 2.15%.

Investors are focusing on the Fed’s coming interest-rate decision which is widely expected to witness a change by a quarter percentage point. Markets will also closely scrutinize the Fed’s President Janet Yellen’s remarks for clues to the central bank’s plans for 2017.

Trade suggestion

Buy Stop at 19,950.00, Take profit at 20,000.00, Stop loss at 19,920.00

 

[CSFX.Support]

Daily Report on December 14, 2016 by Capital Street FX

Daily Report on December 14, 2016



Global shares were cautious ahead of the U.S. presumed second rate hike in the last ten years later Wednesday. The MSCI Asia Pacific Index edged 0.1 percent higher with Australia’s S&P/ASX 200 Index rising 0.7 percent. Hong Kong’s Hang Seng Index was also a rise but Japan’s Topix and the Shanghai Composite Index dropped 0.1 percent and 0.5 percent, respectively. European equities opened lower while U.S. futures indexes declined.

The U.S. dollar swung between gains and losses before the Federal Reserve’s expected interest-rate increase announced in late U.S. session. The greenback may have a muted reaction to the Fed’s decision to make a change to its key rates but will vacillate in a much wider range following Chair Janet Yellen’s subsequent press conference.

Crude oil fell on Wednesday on the back of a report that showed an unexpected climb in U.S. crude supplies for the week ended Dec. 9. The American Petroleum Institute late Tuesday post an increase of 4.7 million barrels in U.S. stockpiles last week, contrasting to forecasts calling for a stockpile decline of 1.7 million barrels by economists. Government’s official data will be released later today.

The Bank of Japan "tankan" survey published on Wednesday found big Japanese manufacturers' sentiment improved for the first time in six quarters to hit a one-year high while service-sector confidence was unchanged from three months ago. Falls in the yen and a pick-up in overseas growth brought the index measuring big manufacturers' business sentiment to plus 10 from plus 6 three months ago, which is the highest level since December 2015.



Technicals

GBPCHF



Fig: GBPCHF H4 Technical Chart

GBPCHF has broken below a couple of moving averages following a retreat from the resistance at 1.28880. The pair is likely to extend its downtrend after falling into a correction at around 1.27850. RSI index which is below 50 and is pointing down signals a strengthening bearish force.

Trade suggestion

Sell Stop at 1.27800, take profit at 1.27000, stop loss at 1.28200



Natural Gas



Fig: Natural gas H4 Technical Chart

Natural gas has been on a decline since the start of this week. The steady downtrend has sent the price to the lowest level since December 02nd. While the RSI index that gauges that relative strength between buyers and sellers are sliding, signaling a strengthening bearish momentum. The short-term MA20 has crossed over the long-term MA50 from above, suggesting further declines.

Trade suggestion

Sell Stop at 3.445, take profit at 3.360, stop loss at 3.480



SILVER



Fig: SILVER H4 Technical Chart

Silver bounced back after failing to broken below the short-term MA20. The price action has also crossed over the long-term MA50, which confirms a reversal into an uptrend. The RSI index has moved past the central line, supporting further advances. The metal may attempt the resistance at 17.200.

Trade suggestion

Buy Stop at 17.055, take profit at 17.200, stop loss at 16.900



DAX 30



Fig: DAX 30 Index H4 Technical Chart

Germany’s DAX 30 index rebounded from the 11300.00 threshold after a sharp rise that brought the market into the overbought zone. Profit taking has just helped send the market escape from the overblown state. However, the short-term MA20 may continue to support the bullish force, signaling a rebound around 11150.00.

Trade suggestion

Buy Limit at 11150.00, take profit at 11300.00, stop loss at 11100.00

 

[CSFX.Support]

EUR/CHF signal by Capital Street FX

From GMT 06:50 14/12/2016
Till GMT 21:00 14/12/2016

Buy at 1.07650
Take profit at 1.07900
Stop loss at 1.07500

 

[CSFX.Support]

Crude Trade Idea by Capital Street FX

Crude Prices Keep Declining Despite A Draw in U.S. Inventories

Oil futures recovered from some of their earlier losses on Wednesday following weekly report from the U.S. government that showed a draw in domestic crude inventories.

The U.S. Energy Information Administration on Wednesday reported crude oil inventories of the country fell for a fourth week in a row, retreating by another 2.6 million barrels for the week ended Dec. 9. The EIA’s report has dispelled concerns over rising output from the U.S. on the back on soaring oil price as the API on Tuesday had posted nearly 5 million barrel build expectation.

However, price remained weak as data from the Organization of the Petroleum Exporting Countries and the EIA both showed record output of the group in November.

Trade suggestion

Sell Stop at 51.85, Take profit at 51.50, Stop loss at 52.00

 

[CSFX.Support]

Gold Market Outlook by Capital Street FX

Depressed By Higher U.S. Rates And Fed’s Steeper Path of Tightening, Gold Plummets

Gold prices tumbled to the lowest level in ten months on Thursday after the Federal Reserve officials on Wednesday raised interest rates for the first time since last December and forecast a more aggressively economic tightening program for 2017.

Gold dropped more than 2.3% to hit the level not seen since early February 2016 at $1134.70 per ounce troy in Asian trading hours, extending its steep slide since the U.S. central bank lifted its target for overnight borrowing costs by 0.25 percentage point to a range of 0.5 percent to 0.75 percent. According to a statement following a two-day meeting in Washington, the Federal Open Market Committee cited “realized and expected labor market conditions and inflation” as reason for this time’s rate hike.

The Fed is widely believed to shift from easing monetary policy toward a tightening territory, as its two main goals which are inflation and labor are moving towards its target. While inflation expectations have increased “considerably”, the labor market is tightening. The central bank stated that it expects three rate increases in 2017, up from two in its September forecasts.

The dollar index soared 0.27% to 102.62 – the highest in the last 13 years, putting pressure on dollar-nominated assets such as bullion as a stronger greenback tends to cause gold more expensive for buyers holding other currencies. In addition, higher interest rates also make noninterest paying assets like gold less attractive.

Fig: GOLD D1 Technical Chart

Gold extends its downtrend following a spike to one-and-a-half-month high at 1337.16. Since then, the precious metal has plunged steeply and has broken below four key Fibonacci levels. Strong bearish has kept the market in the oversold zone for more than 1 month. Although the ADX index has been soaring, the downtrend seems limited. A pull back in near term is expected.

Trade suggestion

Sell Stop at 1137.00, Take profit at 1125.00, Stop loss at 1145.00

 

[CSFX.Support]

NZD/USD signal by Capital Street FX
From GMT 07:00 15/12/2016
Till GMT 21:00 15/12/2016

Sell at 0.70900
Take profit at 0.70700
Stop loss at 0.71000

 

[CSFX.Support]

Daily Report on December 15, 2016 by Capital Street FX


Daily Report on December 15, 2016



The U.S. dollar marched broadly higher versus all of its peers on Thursday after the Federal Reserve decided to make a change on its rates and boosted the outlook for the interest rate policy in coming years. The dollar index soared nearly 0.8% to 103.00, the highest level since early 2003 in early U.S. session.

The U.S. central bank hiked its target for overnight borrowing costs by 0.25 percentage point to a range of 0.5 percent to 0.75 percent on Wednesday, updating its forecast of median fed-funds rate to 1.4% by the end of 2017, 2.1% at the end of 2018 and 2.9% in 2019.

This means that there will be three quarter-percentage-point interest-rate increases over each of the next three years. This pace is faster than what was forecast in September, when there were only two rate increases next year projected.

Meanwhile, the Bank of England held its key interest rate unchanged on Thursday, warning about slower pickup in inflation next year due to recent appreciation in the British Pound. In its latest and final policy decision of 2016, the Monetary Policy Committee, led by Governor Mark Carney, voted unanimously to keep the benchmark rate at 0.25 percent as well as keep its two asset-purchase programs running intact.

Earlier on the day, the Swiss National Bank also kept interest rates unchanged at record low levels to keep a lid on the "significantly overvalued" Swiss franc. Given political uncertainties including upcoming elections in several countries in the euro area and the exit negotiations between the UK and the EU presumed to be triggered next March, the Swiss franc has strengthened against its major peers. A strong franc is considered to be negative for Switzerland's export-based economy, as it pushes up the price of Swiss products and slashes profit margins of companies.



Technicals

EURGBP



Fig: EURGBP H4 Technical Chart

EURGBP has been trading sideways to lower below the 38.2% Fibonacci level at 0.83950. The pair has also been under downwards pressure from the two moving averages that are hanging above the price action. These two MAs contributed to restraining the bullish force and damping the price lower. With RSI indicating overwhelming bearish momentum, EURGBP may attempt the support at 0.83000.

Trade suggestion

Sell Stop at 0.83500, Stop loss at 0.83750, Take profit at 0.83000



NZDUSD



Fig: NZDUSD H4 Technical Chart

NZDUSD has broken out of an upwards slopping trendline to fall as low as 0.70500 – the level not seen since the start of December. The price action has also crossed over two MAs, suggesting a reversal into a downtrend. Although the market has entered the oversold zone, as indicated by the RSI index, the ADX index is soaring, signaling further declines.

Trade suggestion

Sell Stop at 0.70400, Stop loss at 0.70600, Take profit at 0.70000



SILVER



Fig: SILVER H4 Technical Chart

Silver dropped steeply below the 61.8% Fibonacci level and even peeking out of the firm support at 16.000. The metal’s slide has sent the market into the oversold zone, as can be observed by two indicator windows. The pair bounced back after falling under 16.000 due to profit taking but the downtrend may bring the price to as low as 15.800.

Trade suggestion

Sell Stop at 16.000, Stop loss at 16.100, Take profit at 15.800



FTSE 100 Index



Fig: FTSE 100 Index H4 Technical Chart

FTSE 100 Index is struggling around the 6973.00 level after consistently failing to break above this level lately. In general, the price has been on an uptrend, which is indicated by higher lows formed in the price action. The short-term MA20 is another support for the bullish momentum. The index is anticipated to approach the 7000.00 milestone.

Trade suggestion

Buy Stop at 6975.00, Stop loss at 6960.00, Take profit at 7000.00

 

[CSFX.Support]

EURUSD Trade Idea by Capital Street FX

Euro Hits the Lowest Since Early 2003 In The Wake of FED’s Decision

In the aftermath of the event that the U.S. Federal Reserve (FED) announced its first interest-rate increase of 2016 on Wednesday, the greenback extended its strong rally versus all of its peers including the euro on Thursday.

The pair EURUSD hit fell more than 1.3% to an intraday nadir of $1.03984 – the lowest level for more than a decade as the Fed had signaled a more aggressive outlook for interest rate policy in coming years. After hiking its target for overnight borrowing costs by 0.25 percentage point to a range of 0.5 percent to 0.75 percent, the central bank stated that it expected the median fed-funds rate to be 1.4% by the end of 2017, soaring to 2.1% at the end of 2018 and 2.9% in 2019.

This means that there will be three quarter-percentage-point interest-rate increases over each of the next three years. This pace is faster than what was forecast in September, when there were only two rate increases next year projected.

Trade suggestion

Sell Stop at 1.04100, Take profit at 1.03700, Stop loss at 1.04300

 

[CSFX.Support]

Daily Report on December 16, 2016 by Capital Street FX


Daily Report on December 16, 2016



The dollar halted its weekly climb on Friday, retreating nearly 0.1% to 103.00 versus a basket of six major currencies. Meanwhile, Asian shares pared some of their weekly drop with European stocks were little changed in early trading. Indeed, the MSCI Asia Pacific Index advanced 0.2 percent, curbing its decline in the week to 1.8 percent. This marked the worst weekly performance since September of the benchmark.

Japan’s Topix rose 0.5%, extending its rally to the sixth straight week. The steady advance has sent the index 1.7% higher, erasing its loss for 2016. Adding to the upbeat moves, China’s Shanghai Composite Index rose 0.2 percent, trimming its biggest weekly drop in eight months. Elsewhere, the Stoxx Europe 600 Index was little changed as of 8:24 a.m. in London, up 0.9 percent for the week.

According to the state-run Securities Daily, China’s central bank has pumped 600 billion yuan into the financial system over the past two days in an attempt to stabilizing the bond and stock markets. The move came as a result of an unprecedented plunge of the bond futures market that triggered a temporary trading halt yesterday.

On the government debt market, yields on Japanese bonds due in a decade advanced as much as 1 and 1/2 basis points to 0.10 percent. In the U.S., Yields on benchmark 10-year treasury notes inched two basis points lower at 2.58 percent, set for their steepest weekly advance in a month after touching their highest level since September 2014.



Technicals

EURGBP



Fig: EURGBP H4 Technical Chart

EURGBP has broken above the 38.2% Fibonacci level at 0.83950. The pair has also penetrated both the short-term MA20 and the long-term MA50, confirming the uptrend. As RSI index is indicating stronger buyers in the market, the currency pair may approach the resistance at 0.84700.

Trade suggestion

Buy Stop at 0.84300, Stop loss at 0.84100, take profit at 0.84700



EURAUD



Fig: EURAUD H4 Technical Chart

EURAUD had to give up its bullish strength after hitting the long-term moving average at 1.41400. The pair had rebounded from the 50.0% Fibonacci level and the appreciation sent the %K line into the overblown market. As the %K line has reversed lower and is about to cross over the %D line from above, the pair may fall further to the support at 1.41600.

Trade suggestion

Buy Stop at 1.42000, Stop loss at 1.42200, take profit at 1.41600



WTI



Fig: WTI H4 Technical Chart

U.S. crude price resumed its down moves following a correction that sent the price to as high as 51.45. Two moving averages hanging above the price action are putting downward pressure on the commodity price, showing signs of a continual downtrend.

Trade suggestion

Sell Stop at 50.50, Stop loss at 51.00, take profit at 49.60



SP500 Index



Fig: SP500 Index H4 Technical Chart

SP500 index is likely to retest the all-time record high level at 2277.35. The index is heading upwards after a correction from the 0.0% Fibonacci level. As can be observed from the RSI chart, the market is in a bullish zone, suggesting further upbeat moves.

Trade suggestion

Buy Stop at 2265.00, Stop loss at 2260.00, take profit at 2277.00

 

[CSFX.Support]

Adobe Trade Idea by Capital Street FX

Adobe Systems Records 12 Consecutive Quarters Earnings Beat Estimates

Shares of Adobe Systems Incorporated swung between gains and losses late Thursday after the software giant reported better-than-expected fourth-quarter earnings results but forecast weak outlook for its fiscal year 2017.

The San Jose-based company posted $0.90 for the last quarter’s earnings per share, which topped the EPS of $0.86 that analysts had expected and marked the 12th consecutive quarter that its earnings beat estimates. Adobe’s revenues surged 23.1% from last year to $1.61 billion, also beating economists’ estimates of $1.59 billion.

However, the company only expects EPS of $3.75 for the full year 2017, which was well short of the $3.84 that analysts were expecting. Full-year 2017 revenues are anticipated to reach $6.95 billion, missing Wall Street’s $7.08 billion projection.

Trade suggestion

Buy Stop at 105.15, Take profit at 106.50, Stop loss at 104.50

 

[CSFX.Support]

Crude Trade Idea by Capital Street FX

Russian Producers To Comply Output-cut Deal, Supporting Crude Prices

Crude oil futures advanced on Friday, spurred by a weakening U.S. dollar and reports indicate that major oil producers will comply with recent agreements to reduce their oil production.

Brent crude soared 1.7% to nearly $55 per barrel after Russian Energy Minister Alexander Novak stated today that all Russian oil companies including state-controlled Rosneft had agreed to trim their crude oil output on the back of the agreement Russia signed with the Organization of Petroleum Exporting Countries over the last weekend.

Before that, Kuwait and Saudi Arabia have also notified customers that they will cut beginning in January.

Trade suggestion

Buy Stop at 55.00, Take profit at 55.50, Stop loss at 55.25