Daily Report on February 15, 2017 by Capital Street FX
Daily Report on February 15, 2017
Asian shares rose back to 19-month peaks on Wednesday, spurred by a record-setting night on Wall Street when banking shares were pushed higher by upbeat remarks from U.S. Federal Reserve President Janet Yellen. All of U.S. stock benchmarks were higher after the close on Tuesday. At the close in NYSE, the Dow Jones Industrial Average jumped 0.45% to hit a new all-time high, while the S&P 500 index soared 0.4%, and the NASDAQ Composite index climbed 0.32%.
Buoyed by a bullish session in the U.S. overnight, MSCI's broadest index of Asia-Pacific shares outside Japan advanced 0.8 percent, edging higher to its highest level since July 2015. Shares in Australia, South Korea and Hong Kong also found themselves in positive territory. In a testimony in Capitol Hill on Tuesday, Fed Chair Janet Yellen stated that the U.S. central bank will likely need to raise rate in upcoming meetings.
Although Yellen did not give explicit indications whether the first rate hike of the year might come at its next meeting in March, May or at the June meeting, she stated clearly that delaying rate increases could leave the Fed's policymaking committee behind the curve. As a result, Fed may have to hike rates quickly, which could cause a recession, Yellen said.
The dollar held gains versus most of its peers including Japanese Yen on expectations of a faster pace of rate hikes. Japan’s stocks rose on the back of a weaker currency.
Yellen is scheduled to appear before the House of Representatives Financial Services Committee later on Wednesday.
Technicals
GBPJPY
Fig: GBPJPY H4 Technical Chart
GBPJPY has surged above a resistance that was formed by connecting lower highs. The pair has also been supported by both long-term and short-term moving averages. As the price has been moving sideways, ADX index is on a slide. However, RSI has pulled back, signaling strengthening bullish force in the market.
Trade suggestion
Buy Stop at 142.700, Take profit at 143.700, Stop loss at 142.200
AUDNZD
Fig: AUDNZD H4 Technical Chart
AUDNZD has been edging higher and is facing a three-and-a-half-month high at the resistance at 1.07000 level. While the RSI has been moving near the overbought zone, which indicates an overwhelming bullish momentum, ADX index is showing a divergence between the +DI and –DI lines. However, the index is ticking lower, signaling a weakening bull. Another resistance at 50.0% Fibonacci level is within the sight.
Trade suggestion
Buy Stop at 1.07000, Take profit at 1.07500, Stop loss at 1.06750
GOLD
Fig: GOLD H4 Technical Chart
Gold one more time had to give up its up moves due to pressure from two MAs moving above the price action. The short-term MA20 has crossed over the long-term MA50 from above, confirming the downtrend. With RSI pulling back from the central line that signals strengthening bearish force, the precious metal may fall lower to retest the support at 1220.00.
Trade suggestion
Sell Stop at 1225.00, Take profit at 1220.00, Stop loss at 1227.00
EURO 50 Index
Fig: Euro 50 Index H4 Technical Chart
Euro 50 index rebounded from the support at 3300.00 following a consolidation as the market has reached the overbought zone, as indicated by the RSI index. Nonetheless, the bull seems to come back to the market with ADX is soaring again. A wide gap between +DI and –DI lines also signal further advance for the stock benchmark.
Trade suggestion
Buy Stop at 3320.00, Take profit at 3340.00, Stop loss at 3310.00
