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Daily Report on March 21, 2017 by Capital Street FX
Daily Report on March 21, 2017
Asian shares advanced on Tuesday with Chinese shares traded in Hong Kong rallying while equities in South Korea attempting the highest close in almost six years. After a close for a holiday yesterday, Japanese shares edged lower but early losses were pared. Japan’s Topix index declined 0.1 percent, trimming an earlier loss of as much as 0.6 percent.
While South Korea’s Kospi soared 1 percent, poised for the highest close since July 2011, New Zealand’s S&P/NZX 50 Index reversed higher after Monday’s 1.4 percent decline, adding 0.4 percent. The Hang Seng China Enterprises Index jumped 0.7 percent to reach the highest since November 2015.
The dollar continued to decline further on the back of Federal Reserve officials’ public appearances on Monday which reflected mixed opinions on the timing of further policy tightening. Indeed, while Chicago Fed President Charles Evans said the central bank could raise interest rates two, three or even four times this year, his Minneapolis colleague Neel Kashkari argued that there was no need to rush.
In minutes released Tuesday of this month’s meeting, the Reserve Bank of Australia highlighted threats associated with the property market and an acceleration of domestic household debt as reasons for the central bank to hold rates at a record-low 1.5 percent.
According to market sources, China's central bank is to inject 80 billion yuan ($11.59 billion) into money markets on Tuesday after having drained a net 120 billion yuan from the money market last week. The People's Bank of China is injecting 50 billion yuan through seven-day reverse bond repurchase agreements, 20 billion yuan through 14-day reverse repos, and an additional 10 billion yuan through 28-day reverse repos.
Technicals
GBPJPY
GBPJPY has been moving sideways between a support at 138.600 and a resistance at 140.500 for almost a month, indicated by the ADX index which is heading downwards. In general, the pair has been under downward pressure by two MAs. RSI is moving in the bearish territory, suggesting that the pair may attempt the lower boundary.
Trade suggestion
Sell Stop at 139.200, Take profit at 138.600, Stop loss at 139.500
EURJPY
EURJPY has been tracing a decline, depressed by two MAs that are hanging above the price action. The pair reversed lower at 121.200 and may retest a support at 120.500. While ADX which is at 16.61 indicates no clear trend in the market, RSI under 50 signaled further down moves.
Trade suggestion
Sell Stop at 121.100, Take profit at 120.500, Stop loss at 121.400
SILVER
Silver has been moving sideways in Asian trading hours, sending ADX index which measures the strength of current trend in the market to below 20. The metal fell below the 38.2% Fibonacci retracement and at the same time crossed over the two MAs. Further down moves are expected.
Trade suggestion
Sell Stop at 17.320, Take profit at 17.220, Stop loss at 17.370
COFFEE
Coffee futures prices broke out of the 23.6% Fibonacci retracement at 142.87 yesterday after having crossed over a couple of moving averages. This signaled a strong uptrend. With soaring ADX and RSI indices, the commodity is expected to test a resistance at 147.30.
Trade suggestion
Buy Stop at 144.90, Take profit at 147.30, Stop loss at 143.70
Daily Report on March 21, 2017
Asian shares advanced on Tuesday with Chinese shares traded in Hong Kong rallying while equities in South Korea attempting the highest close in almost six years. After a close for a holiday yesterday, Japanese shares edged lower but early losses were pared. Japan’s Topix index declined 0.1 percent, trimming an earlier loss of as much as 0.6 percent.
While South Korea’s Kospi soared 1 percent, poised for the highest close since July 2011, New Zealand’s S&P/NZX 50 Index reversed higher after Monday’s 1.4 percent decline, adding 0.4 percent. The Hang Seng China Enterprises Index jumped 0.7 percent to reach the highest since November 2015.
The dollar continued to decline further on the back of Federal Reserve officials’ public appearances on Monday which reflected mixed opinions on the timing of further policy tightening. Indeed, while Chicago Fed President Charles Evans said the central bank could raise interest rates two, three or even four times this year, his Minneapolis colleague Neel Kashkari argued that there was no need to rush.
In minutes released Tuesday of this month’s meeting, the Reserve Bank of Australia highlighted threats associated with the property market and an acceleration of domestic household debt as reasons for the central bank to hold rates at a record-low 1.5 percent.
According to market sources, China's central bank is to inject 80 billion yuan ($11.59 billion) into money markets on Tuesday after having drained a net 120 billion yuan from the money market last week. The People's Bank of China is injecting 50 billion yuan through seven-day reverse bond repurchase agreements, 20 billion yuan through 14-day reverse repos, and an additional 10 billion yuan through 28-day reverse repos.
Technicals
GBPJPY
GBPJPY has been moving sideways between a support at 138.600 and a resistance at 140.500 for almost a month, indicated by the ADX index which is heading downwards. In general, the pair has been under downward pressure by two MAs. RSI is moving in the bearish territory, suggesting that the pair may attempt the lower boundary.
Trade suggestion
Sell Stop at 139.200, Take profit at 138.600, Stop loss at 139.500
EURJPY
EURJPY has been tracing a decline, depressed by two MAs that are hanging above the price action. The pair reversed lower at 121.200 and may retest a support at 120.500. While ADX which is at 16.61 indicates no clear trend in the market, RSI under 50 signaled further down moves.
Trade suggestion
Sell Stop at 121.100, Take profit at 120.500, Stop loss at 121.400
SILVER
Silver has been moving sideways in Asian trading hours, sending ADX index which measures the strength of current trend in the market to below 20. The metal fell below the 38.2% Fibonacci retracement and at the same time crossed over the two MAs. Further down moves are expected.
Trade suggestion
Sell Stop at 17.320, Take profit at 17.220, Stop loss at 17.370
COFFEE
Coffee futures prices broke out of the 23.6% Fibonacci retracement at 142.87 yesterday after having crossed over a couple of moving averages. This signaled a strong uptrend. With soaring ADX and RSI indices, the commodity is expected to test a resistance at 147.30.
Trade suggestion
Buy Stop at 144.90, Take profit at 147.30, Stop loss at 143.70
