Daily Market Updates & Trading Signals By Option Banque

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Sugar Trade Idea by Option Banque

Sugar May Not Be A Sweet Investment For Bulls Anymore – Strong Correction From 4 Year Highs

Sugar prices have dropped in three out of the last four trading days and may slide further as an overblown market which sent sugar to four-year highs is tempting producers and sapping demand.

Thanks to the rally in sugar which stated in August 2015, production in major exporters is witnessing an explosion. Australia – the world’s third biggest sugar producer – is expected to increase its exports by 4 million tons in 2016/2017.

The world’s largest sugar exporter, Brazil, is forecast to export over 27 million tons in spite of a disappointing cane harvest in the Central/Southern regions. As prices are around multi-year highs, mills have been prioritizing sugar over ethanol production.

Against the backdrop of rising supply, demand for imports in China, the world’s biggest importer of sugar, is expected to fall below earlier forecasts. Chinese sugar imports are expected to decline by 1.9 million tons to a total of 6 million tons in 2016-17, due to high prices and an improvement in domestic production.

Trade suggestion
Buy Digital Put Options from 22.85 to 22.50 valid until 20:00 GMT October 12, 2016

 

[Option_Banque]

EURUSD Market Outlook by Option Banque

Dollar Defies Strong EU Data As Rate Hike Expectations Dominate – Put Options Suggested On EURUSD

The Euro has been collapsing against the U.S dollar since the start of this week. Even though the ZEW Centre for Economic Research reported stronger-than-expected economic data readings in both the EU and Germany, the positive outlook for the EU economy failed to overcome the pro dollar sentiment, resulting from expectations of a rate hike in the US.

According to the ZEW Survey, the gauge for German economic sentiment improved more than expected in October. The index rose to 6.2 this month from September’s reading of 0.5, beating analysts’ forecast for an increase to 4.3. With a level above 0.0 indicating optimism, ZEW president professor Achim Wambach commented that the figure reflected relatively robust economic activity in Germany. However, Wambach also warned about risks within the country’s banking sector, referring to the case of Deutsche Bank and the investigation into its selling of mortgage-backed securities ahead of the Financial Crisis in 2008.

The survey further reported that the composite index for the entire EU increased to 12.3 in October from 5.4 a month earlier. Consensus forecasts had expected a rise to 6.3. The positive results in the European data released today, have not been not spur fresh demand for the single currency so far today. However, the U.S dollar has continued to strengthen as the Federal Reserve is widely expected to make a move on benchmark interest rates this December.
EURUSD hit an intra-day low at 1.10707 – a level last seen on August 9th, after comments from Fed officials reinforcing the case for a rate hike sooner rather than later. Echoing the comments from his colleagues over the past week, Chicago Fed President Charles Evans said that the NFP reading on Friday was a “pretty good number”. Evans further stated that he was fine with a rate increase by the end of this year, but more evidence on the strength of the economy, and especially inflation making progress, were necessary before deciding conclusively.
Yields on 10 year US bonds consequently rose to a four-month high on Tuesday as traders returned to the markets after the Columbus Day holiday yesterday. As a result of soaring U.S debt yields, more foreign investors entered the US Treasury market and pushed up demand for the currency.

Fig: EURUSD D1 Technical Chart

EURUD has fallen out of the narrowing trading range that has been in formation since late 2015. The market has breached the lower boundary of the range and is now heading downwards to the 50.0% retracement level at 1.10570. The DMA20 has penetrated the DMA50 from above, suggesting further declines for the pair. The price action has broken through both the MA’s as well and both MA’s are now placed above the price action. The RSI index has dropped to as low as 38.73, retreating alongwithe with the stochastic lines, thus providing strong confirmation for the current down-move

Trade suggestion
Buy Put Option from 1.10780 to 1.10500 valid until 20:00 GMT October 11, 2016

 

[Option_Banque]

Daily Report on October 12, 2016 by Option Banque

Daily Report on October 12, 2016



Asian shares declined for a fourth day after a Wall Street’s sell-off on Tuesday. Not only did a stronger dollar weigh on multinational companies, but a gloomy start of the earnings session knocked down investor confidence in stock markets. The Dow Jones fell 1.09%, to 18,128.66, the S&P 500 lost 1.24%, to 2,136.73 and the Nasdaq Composite dropped 1.54%, to 5,246.79, led by 11.4% decline in Alcoa’s shares.

Lower oil prices were also one of factors dragging down equity markets yesterday. Crude oil finished lower on Tuesday amidst concerns that Russia will not be fully committed to an OPEC deal to curb oil output, even after Russian President Putin had pledged to join the cartel to re-stabilize the oil market.

Topping up to comments by Russia’s Energy Minister Alexander Novak that his country is currently only considering output freeze option, not production cut, Igor Sechin - the Executive Chairman of oil giant Rosneft - said his company will not trim or freeze output as part of a possible agreement with OPEC.

All major Asian benchmarks ticked lower today. The MSCI Asia Pacific Index dropped 0.4%. Hong Kong’s Hang Seng Index and the Shanghai Composite Index declined 1.1% and 0.3%, respectively. The British Pound bounced back 1.5% against the greenback on the news reported by Bloomberg that Prime Minister Theresa May had accepted the participation of Parliament in the decision on when to trigger the two-year period of negotiation with the EU regarding the departure of the U.K.

Britain’s Parliament will debate on Wednesday to gain the right to “properly scrutinize” the government’s plan for leaving the EU before PM May begins formal talks. If it wins, the triggering of Article 50 of the Lisbon Treaty, which starts the exit process, may be delayed compared to May’s initial plan as most parliamentarians are in favor of remaining within the EU.



Technicals

USDJPY



Fig: USDJPY H4 Technical Chart

As can be observed from the chart, the pair USDJPY has resumed its uptrend after crawling back from near 104.100 handle. Recent candles have long lower shadows and nearly no upper shadows, which suggested that the pair may have bottomed out. Bulls which are still dominating the market, have stepped in to support the pair from lows. The fact that %K line has crossed over the %D line from below has consolidated upbeat moves.

Trade suggestion

Buy Digital Call Option from 103.650 to 104.100 valid until 20:00 GMT October 12, 2016



AUDUSD



Fig: AUDUSD H4 Technical Chart

The Aussie pulled back from near 38.2% retracement but the upside seem limited as the pair is struggling with two MAs lingering above the price action. Lower lows since the end of September and consistent reversals upon coming up against the moving averages have indicated strengthening bears. RSI is close to the 50 line and is likely to pull back like it did on Monday. The support at 38.2% level is within sight.

Trade suggestion

Buy Digital Put Option from 0.75750 to 0.75300 valid until 20:00 GMT October 12, 2016



GBPNZD



Fig: GBPNZD H4 Technical Chart

GBPNZD has been under heavy downward pressure exerted by the two MAs placed above the price action. The short-term MA20 that forced the pair to reverse lower yesterday, continued to push the pair lower today. With the RSI remaining in bearish territory and pointing towards the oversold zone, GBPNZD is expected to test the low at 1.71400 again.

Trade suggestion

Buy Digital Put Option from 1.73050 to 1.71400 valid until 20:00 GMT October 12, 2016



BRENT



Fig: BRENT H4 Technical Chart

Brent crude extended its rally after the price fell from one-year highs at around 53.72. Thanks to the dynamic support from the MA20, the market pulled back again and is heading upwards to re-attempt the resistance at 53.36 which is the 61.8% Fibonacci level where it had to give up its strength and reverse lower. Along with the stochastic chart that has shown the convergence of the %K line and %D line, the ADX chart where ADX index surged above 20 are factors consolidating the uptrend.

Trade suggestion

Buy Digital Call Option from 52.70 to 53.35 valid until 20:00 GMT October 12, 2016



Natural Gas



Fig: Natural Gas H4 Technical Chart

Having soared above the 38.2% retracement at 3.187 to as high as 3.300, Natural gas trimmed its rally as the one way move may have exhausted bulls for now. Too many buyers created an overblown market vulnerable to reversals, as everyone who wanted to buy may have already bought. Sellers, therefore, jumped in and pushed the price back down. But as can be seen from the chart, all of the recent candles have closed at the same/similar levels, which suggested that bears could not dampen the price lower. Hence, this may be a possibility for a reversal back into an uptrend.

Trade suggestion

Buy Digital Call Option from 3.230 to 3.300 valid until 20:00 GMT October 12, 2016



EURO50



Fig: Euro Stoxx 50 H4 Technical Chart

Euro Stoxx 50 has generally been following an uptrend supported by a couple of moving averages hovering below the price action. The index has reversed consistently after hitting highs, but we can observe higher highs and higher lows, which suggests that buyers are the overwhelming force currently. As the RSI index has bounced back from the dividing line between bullish and bearish territory, Euro Stoxx 50 may re-attempt the high at 3061.00 logged on September 22nd.

Trade suggestion

Buy Digital Call Option from 3030.00 to 3061.00 valid until 20:00 GMT October 12, 2016

 

[Option_Banque]

AUD/NZD signal by Option Banque

From 1.07150
Till 1.07400

Option Digital
Direction Call
Valid Until GMT 21:00 11/10/2016

 

[Option_Banque]

U.S Stocks Vacillate Before Release Of FOMC Minutes – Where Do The Stock Markets Go F

U.S Stocks Vacillate Before Release Of FOMC Minutes – Where Do The Stock Markets Go From Here?

U.S. equities swung back and forth on Wednesday ahead of the release of minutes from the Federal Reserve’s September meeting. At the time of writing, most U.S benchmarks were in positive territory.

The S&P 500 index rose 0.23%, with 8 out of 11 sectors trading higher. The Real Estate sector led the market, rising 0.93% even after total mortgage applications volume lost 6% on a seasonally adjusted basis for the week ended Oct. 7, compared to the previous week, according to data from the Mortgage Bankers Association.

The Financial sector was also among gainers, ahead of the release, amid anticipation of hawkish details in the minutes. Banking giants namely Wells Fargo, JPMorgan Chase and Citigroup are all slated to report quarterly results before the market open on Friday.

Energy companies lost ground today as oil sold off after the monthly output report from OPEC that raised concerns over the likelihood of an agreement to curb production amongst OPEC members as well as with other non-OPEC oil producers.

Trade suggestion
Buy Digital Put Option from 2140.00 to 2135.00 valid until 20:00 October 12, 2016

 

[Option_Banque]

Gold Market Outlook by Option Banque

Gold Moves Indecisively Ahead Of FOMC Meeting Minutes – Will 1250.00 Threshold Be Broken?

Gold rose in the early part of the Asian trading session in the wake of a retreating U.S dollar, but has been edging lower in early European trading hours as the greenback claimed back its strength ahead of the release of the minutes from the September FOMC meeting, which are due to be released later today.
The precious metal has lost about 10% compared to the 28 month peak level of $1375.00 per ounce recorded in early July this year. Particularly, since September 28th, gold has dropped more than 6.7% amid signs of improving U.S. economic data and hawkish comments from Fed officials that have fueled expectations that the U.S Federal Reserve will raise interest rates by the year end.

Minutes from the September meeting of the Federal Reserve Open Market Committee (FOMC) are scheduled to be released at 18:00 GMT on Wednesday. At the last meting, policy makers left the federal funds rate target unchanged and maintained the target range of 0.25% to 0.5%. However, 3 of the 10 voting members of the FOMC including Boston Fed President Eric Rosengren had dissented the decision, and voted for a rate increase instead.

Rosengren has been considered as being dovish for a long time, as he has supported ultra-low rates in order to push down unemployment. With the number of new jobs added remaining steady month after month, and the jobless rate at or below 5 percent so far this year, Rosengren urged his colleagues to tighten policy to avoid overheating the labor market and triggering inflation.
The minutes are expected to provide markets with more details about the division within Fed officials. A hawkish leaning within the Fed, may cement the likelihood of a hike in December and consequently push up the U.S dollar. Traders have priced in only an 8.3% probability that the Fed will raise rates at its November meeting, but the chance of such a move by mid-December has risen to nearly 70%, according to the CME’s Fed Watch Tool.

The yellow metal is highly sensitive to U.S. interest rates. Not only will a strengthening greenback reduce gold’s appeal as it makes the dollar-denominated asset more expensive for investors holding other currencies, but higher yields from interest-bearing assets such as bonds will also dampen the metal’s competitiveness.

As stated by the Associated Chambers of Commerce of India, the country’s gold imports declined by 58.96% to 270 tons in the period January to September 2016, from 658 tons that were imported during the same period last year. According to the research report, gold imports declined partly due to a prolonged strike by jewelers in March and April to demand a roll back of the 1% excise duty that was imposed on gold and silver jewelry.

Another reason for the downturn in Indian gold imports is the continuation of the 10% customs duty on import of gold bars, which has spurred smuggling of gold, leading to a decline in official imports and reported numbers.
GOLD Technical Analysis

Fig: GOLD D1 Technical Chart

Gold has been trading sideways for five trading days in a row above the 38.2% retracement level at around 1250.00. With the cautiousness on the fundamental side, and the fact that the gold market has entered the oversold zone, sellers have restrained the downward push and are simply waiting it out. If the minutes are not in favor of the precious metal, gold can breach the 38.2% level and collapse to as low as the 50.0% level.

Trade suggestion
Buy Digital Put Option from 1249.50 to 1235.00 valid until 20:00 GMT October 12, 2016

 

[Option_Banque]

Daily Report on October 13, 2016 by Option Banque

Daily Report on October 13, 2016

Asian shares slumped for the fifth trading session in a row, stumbling to three-week lows after an unexpected decline in Chinese exports raised fresh concerns about the health of the world’s second biggest economy. MSCI's broadest index of Asia-Pacific shares outside Japan dropped 1% to the lowest since mid-September. Other Asian stock indices such as Hong Kong’s Hang Seng index, and the Japanese Nikkei 225 also fell today.

According to the General Administration Customs - China, the country’s exports diminished by 10% in September from a year earlier while imports also witnessed a decline of 1.9% after a pickup in August. Worse-than-expected data left China with a trade surplus of $41.99 billion for the month – a level that missed the forecast for a surplus of $53.1 billion.

Minutes of the U.S. central bank’s September meeting, released on Wednesday reinforced the case for tighter monetary policy before the end of the year.

Against the background of weak Chinese reports suggesting tepid domestic and foreign demand, increasing expectations of a U.S. interest-rate hike and uncertainties spurred by Britain’s efforts to leave the European Union, the Japanese Yen has been rising in a knee-jerk reaction. A fall in equities gave a lift to the yen – one of the safe haven currencies which investors seek in times of market stress.

Oil extended losses following the report by the American Petroleum Institute that U.S. crude inventories rose by 2.7 million barrels to 470.9 million barrels in the week to Oct. 7. This would be the first rise in oil stocks following five straight weeks of declines. The U.S. Energy Information Administration (EIA) is due to publish official inventory data later on Thursday.



Technical

AUDUSD



Fig: AUDUSD H4 Technical chart

The Aussie is following a steady downtrend that has pushed AUDUSD to break below the 38.2% retracement level at 0.75255. The currency pair pulled back yesterday after encountering the resistance zone between two moving averages. These two MAs are expected to cast downward pressure on the pair for the near future and may send AUDUSD to as low as the 50.0% level.

Trade suggestion

Buy Digital Put Option from 0.75000 to 0.74550 valid until 20:00 GMT October 13, 2016



NZDUSD



Fig: NZDUSD D4 Technical chart

NZDUSD dropped below the 38.2% level on Monday and continues to head southwards through this week. After some correction yesterday, the Kiwi resumed the down moves today and is anticipated to find support at around 0.69600. The RSI index has neared the oversold zone and the ADX has soared as high as 51.83. Therefore after hitting this level, a pullback could come about.

Trade suggestion

Buy Digital Put Option from 0.70400 to 0.69600 valid until 20:00 GMT October 13, 2016



EURJPY



Fig: EURJPY H4 Technical chart

As can be seen from the chart, EURJPY has re-entered the trading range between a lower boundary at 114.000 and the upper boundary at 116.000, where it had been trapped from late-August to mid-September. The pair is heading towards the support at 114.000 and may break through this level as the bearish signals are quite strong. The two MAs are very likely to converge and are placed above the price action, the RSI index is pointing downwards, and there is wide divergence between the %K line and the %D line in the stochastic charts. All of this combines to suggest a powerful downtrend.

Trade suggestion

Buy Digital Put Option from 113.900 to 113.000 valid until 20:00 GMT October 13, 2016



GOLD



Fig: GOLD H1 Technical chart

As can be observed from the hourly chart, the gold market has received a signal suggesting a reversal into an up-move as the 20-period MA has penetrated the 50-period MA from below. With the RSI indicator surging above the 50 line yesterday and heading upwards to the overbought zone, the yellow metal can soar as high as 1265.00.

Trade suggestion

Buy Digital Call Option from 1260.00 to 1265.00 valid until 20:00 GMT October 13, 2016



Sugar



Fig: Sugar H1 Technical chart

Sugar had to give up its strength after coming up against a couple of moving averages which are placed above the price action. The sugar market has been floating in bearish territory, as indicated by the RSI index that has inched down to as low as 44.36. The support at 22.50 can be where we take profit.

Trade suggestion

Buy Digital Put Option from 22.90 to 22.50 valid until 20:00 GMT October 13, 2016



NASDAQ 100



Fig: NASDAQ 100 H4 Technical chart

The NASDAQ 100 index created a gap down at the market open on Wednesday. The index has fallen back into the trading range between 4840.00 and 4750.00 and might pay a visit to the lower boundary at 4750.00 as the short-term MA20 has crossed over the long-term MA50 from above, indicating bears overshadowing the market.

Trade suggestion

Buy Digital Put Option from 4780.00 to 4750.00 valid until 20:00 GMT October 13, 2016

 

[Option_Banque]

SP500 signal by Option Banque

From 2122.00
Till 2110.00

Option Digital
Direction Put
Valid Until GMT 21:00 13/10/2016

 

[Option_Banque]

Oil Trade Idea by Option Banque

Oil Boosted By Record Chinese Imports But Upside Seems Short-Lived

Oil reversed higher on Thursday, after closing in the red for two days in a row. Despite the API’s weekly report showing a rise in U.S stockpiles for the first time in the last five weeks and record-high oil production from OPEC in September, the crude market received some support today.

Oil imports to China were reported to have hit a new record last month, eclipsing the United States as the world’s top buyer of foreign oil for the third time in a year. According to Chinese data, the country’s volume of crude imports rose by 18% in September from a year earlier, to 33.06 million tons, or 8.04 million bpd.

However, the current rally in crude prices is estimated to be limited in strength, amid concerns over the possibility of an output curb agreement which will be discussed between OPEC and non-OPEC producers next month, and the return of U.S shale oil producers as prices return to levels where shale-oil production can be come viable.

Oil Trade Suggestion
Buy Digital Put Option from 51.30 to 50.00 valid until 20:00 GMT October 13, 2016

 

[Option_Banque]

DAX30 Market Outlook by Option Banque

DAX30 Index Collapses Following Chinese Data And FOMC Minutes – Buy Puts

European stocks plunged on Thursday with most benchmark indices trading lower. Germany’s DAX30 index was not an exception. The index looks set to finish lower for a third consecutive session against the background of rising expectations of a U.S rate increase in December and a drop in Chinese trade activity that triggered concerns over global growth.

The case for a rate hike by the end of this year has been strengthened after the release of the FOMC minutes published yesterday. In the minutes released, policymakers described their September decision to leave interest rates unchanged as a “close call”. According to the CME’s Fed Watch tool, markets are pricing an almost 70% probability of a rate increase at the last FED meeting of this year in December.

According to China’s General Administration Customs, the country’s exports diminished by 10% in September from a year earlier while imports shrank 1.9%. Weaker demand for Chinese goods was seen both at home and abroad, including in the U.S., Europe and much of Asia.

Under the influence of upcoming U.S policy tightening and signs of economic fatigue in China, global stocks including German shares declined sharply. The DAX30 has tumbled 1.56% on the day, so far. Most of its constituents are trading lower currently.

Banks topped the list of losers with shares of the two biggest German lenders Deutsche Bank and Commerzbank losing more than 3% each. Besides the ongoing negotiation with the U.S related to the probe tied to its sale of residential mortgage-backed securities, Deutsche Bank will have to pay another $9.5 million penalty to settle civil charges that it failed to properly safeguard material non-public information generated by its research analysts and published an improper research report.

Airlines and carmakers also dropped with Deutsche Lufthansa down 2.5% and Volkswagen falling 2.2% in Frankfurt. Deutsche Lufthansa AG was downgraded by Zacks Investment Research from a “buy” rating to a “strong sell” rating in a research report issued on Tuesday.

Shares of Germany’s largest housing association Vonovia, and pharmaceutical company Merck are only two issues that have been in positive territory today.
DAX

Fig: DAX30 H4 Technical Chart

DAX30 created a big gap down on the opening on Thursday and continues to remain on track to decline towards the 23.6% retracement level at 10306.58. The index, which had been supported by the two MAs placed below the price action since late September, has now fallen below these zones of support. The fall has also pushed the market into bear territory. The DAX is very likely to fall deeper to test the 23.6% level.

Trade suggestion
Buy Digital Put Option from 10370.00 to 10310.00 valid until 20:00 GMT October 13,

 

[Option_Banque]

USD/CHF signal by Option Banque

USD/CHF signal by Option Banque

From 0.98900
Till 0.99100

Option Digital
Direction Call
Valid Until GMT 21:00 14/10/2016

 

[Option_Banque]

USDCAD Market Outlook by Option Banque

USDCAD Choppy Ahead Of U.S Data, Yellen Speech – Call Options Favoured

USDCAD swung between gains and losses on Friday and may close the week lower due in large part to rising oil prices. With no significant economic data released during the week, the Canadian dollar’s movements have hinged on the oil market, while investors betting on the U.S dollar are cautiously waiting for important events scheduled for later today.

Oil extended its gains on Friday, after turning higher on Thursday, even after the U.S. Energy Information Administration on Thursday reported that U.S. crude stocks rose for the first time in six weeks. Crude stockpiles in the U.S swelled by 4.9 million barrels in the week ending Oct. 7th. Total inventories rose to 474 million barrels, but distillates, which include diesel and heating oil, dropped by 3.7 million barrels and gasoline fell by 1.9 million barrels.

As a result, the commodity dependent Loonie closed yesterday’s session at 1.31850 versus the U.S dollar but has lost some steam as the greenback regained ground amid rising expectations that the Federal Reserve will raise rates by the end of this year.

The U.S labor market remains a supporting factor that is helping build up Fed policymakers’ confidence to make a move on rates for the first time since December 2015. Adding to last Friday’s Non-farm Payrolls data which were considered to be “ideal” by Fed Vice President Stanley Fischer, the U.S Department of Labor on Thursday reported the lowest number of people filling for unemployment benefits in four decades.

According to the weekly jobless claims report, jobless claims were at 246,000 in the week ending October 8th, remaining below 300,000 for 84 straight weeks and indicating a healthy labor market. In the current environment, where there is a scarcity of potential job candidates and record-high number of job openings, employers have to either restrain from laying off workers or have to raise wages. Higher incomes equate to the possibility of higher inflation as disposable incomes rise across the board and household income and spending rise as a result of it. Household spending accounts for 70% of the U.S economy.

Markets are pricing in a more-than-two-thirds chance of a rate hike at the last FOMC meeting of the year which is scheduled on December 13-14. Prior to the opening of the U.S session, a batch of U.S economic data including September retail sales and producer prices will be released. September retail sales and core retail sales are expected to swing back into expansion after shrinking or remaining unchanged in the two previous months.

Federal Reserve Chairwoman Janet Yellen will deliver a speech at 17:30 GMT at the Boston Annual Research Conference. President Yellen will talk about the US economic recovery. Further clues regarding the pace of future rate hikes are being expected with great anticipation..

Fig: USDCAD D1 Technical chart

USDCAD has been in an uptrend since September 07th. Despite consistent reversals to the downside, the pair has been able to create higher lows and higher highs to reach the 38.2% retracement level. Besides the upward sloping support trendline connecting the higher lows, the market has been supported by the two MAs placed below the price action. The pair may surge higher since bulls are overwhelmingly dominant in the market, as indicated by the strength of the RSI.

Trade suggestion
Buy Digital Call option from 1.32000 to 1.32400 valid until 20:00 GMT October 14, 2016

 

[Option_Banque]

SP500 Trade Idea by Option Banque

Led By Financial Sector, SP500 Index Trims Weekly Losses

U.S. stocks rallied on Friday, as sentiment on risky assets was enhanced after a trio of U.S biggest lenders reported third-quarter results that topped markets’ estimates, although all three banks published sales and earnings fell from the same period last year.

All 11 sectors making up the SP500 were trading higher, led by 1.06% increase in shares of financial institutions.

Another factor that built up market’s confidence is the data on U.S retail sales. As stated by the Census Bureau, sales at U.S. retail stores rebounded to 0.6% in September, after declining 0.3% in August. The so-called core retail sales that strips out sales of automobiles also posted a gain of 0.5%

Trade suggestion
Buy Digital Call Option from 2140.00 to 2145.00 valid until 20:00 GMT October 14, 2016

 

[Option_Banque]

Central Bank Meetings Back In Focus, Busy Week For British Pound

Central Bank Meetings Back In Focus, Busy Week For British Pound

U.S stocks were almost unchanged on Friday after paring earlier gains in the second half of the session. At the close, the Dow Jones Industrial Average rose 0.22%, while the SP 500 index and the NASDAQ Composite index finished just above break-even.

Financials led advancers as JPMorgan Chase, Wells Fargo and Citigroup, all reported third-quarter earnings data before the opening bell, and posted better-than-expected quarterly results. Stock investors were taken for a choppy ride this week, with sentiment largely driven by Chinese economic data, U.S earnings reports, and comments from the U.S Federal Reserve about the possibility of a move on interest rates this year.

The second presidential debate between Democrat Hillary Clinton and Republican Donald Trump started the week-gone-by without causing any significant moves on the major markets as investors continue to retain their view that Clinton holds an edge going into presidential election against her Republican rival. The only real market that witnessed some major moves based on the progress of the candidates was the USD/MXN(Mexican Peso) cross. The Mexican Peso rallied strongly against the USD after the Trump campaign was hit by the sexual harassment allegations against Trump.

The past week also witnessed the return of Chinese traders after a week-long break, and was marked by a significant drop in the local currency. The Chinese Yuan dipped to a six-year low against the U.S dollar last Monday, after the central bank’s announcement that the country’s foreign exchange reserves dropped more than expected in September. This drop in reserves marked a decline for the third month in a row and once again rang alarm bells over capital outflows from the world’s second-largest economy.

Chinese economic data for September set the tone for markets in the second half of the week ending on October 14th. While Thursday’s disappointing export-import data spurred concerns over weak demand in both China itself and other parts of the world such as the U.S, Europe and most part of Asia, Friday’s better-than-anticipated inflation results helped ease worries about the health of Chinese economy and spurred a bounce back in stock markets.

The U.S dollar continued to sustain its strength and finished the week higher against most of its peers as solid data on U.S. retail sales and producer prices reinforced the list of data releases supporting perceptions of a reasonably strong US economy and also reinforced perceptions of inflation making progress towards the central bank’s target.

As stated by the Census Bureau on Friday, sales at U.S. retail stores rebounded to 0.6% in September, after declining 0.3% in August. Core retail sales that strip out sales of automobiles also posted a gain of 0.5%. The data was in line with expectations. Producer prices and core producer prices, increased 0.3% and 0.2%, respectively, which were stronger than the market’s forecast.

Positive figures are believed to nudge a data-dependent Fed closer to a rate hike decision in the coming months. In an interview with The Wall Street Journal on Friday, New York Fed President William Dudley stated that he expected a rate rise to come as soon as this year.

Dudley’s remarks followed comments earlier in the day from Fed Chair Janet Yellen that indicated that the Fed might want to let inflation run hot for a while. Faced with an unusual situation of weak demand against strong supply, Yellen supposed that the central bank may be inclined to maintain easier monetary policy for longer. The comments were considered as dovish, but markets were not seeing them as a reason for the central bank to back-off from raising rates by year end.

Looking ahead to the coming week, investors focussing on the U.S dollar will be waiting for multiple economic data releases through the week. September consumer price data is due to be released on Tuesday. Building permits data is slated for Wednesday. Speeches by Fed officials including Fed Vice President Stanley Fischer and New York Fed President William Dudley are also scheduled in the week, in addition to the regular economic releases released every week such as Jobless Claims and Energy Inventories Data.

Moving on to the EU, the EUR observed the most severe weekly loss since the week ending June 24. The euro dropped below 1.10000, collapsing to the lowest since July 27th versus the U.S dollar amidst talks about the European Central Bank extending the QE at next week’s meeting. ECB President Mario Draghi has continuously stated that ECB policymakers are comfortable with the current level of stimulus, but may be willing to increase it anytime, if the economy weakens and demands a bigger stimulus.

At the last ECB meeting, President Draghi expressed more confidence about the outlook for the Eurozone economy, and even stated that the central bank had not discussed about changes to the QE program. Interest rates are expected to remain unchanged at the ECB meeting on Thursday. However, if Mario Draghi reinforces his concerns about the economy and puts greater emphasis on the need for more stimulus, further losses in the euro currency are likely.

Over in the U.K, the Sterling will also be under the spotlight next week given a busy economic calendar. From Tuesday to Thursday, the British pound will be affected by the results of data on inflation, average earnings, retail sales and employment numbers.

Above all, the outcome of the British High Court’s proceedings regarding the participation of the U.K Parliament in negotiations on the future EU-U.K. relationship will also exert significant effect on the GBP and the London Stock Exchange, not to mention indirect effects on the Euro Currency and European Stock Markets as well.

Last week, Prime Minister May made a concession to allow the Parliament to scrutinize the government’s plan for leaving the EU before she begins formal talks. However, PM May argued that she has the sole right to determine when Article 50 is invoked. In case the court finds that Parliamentary approval is needed, it would delay the process beyond the first quarter of 2017, as most parliamentarians are in favor of remaining within the EU. Nevertheless, regardless of the outcome from the high court, the case is likely to be sent to the Supreme Court, which may hear the case before the end of the year.

Out in Canada, the CAD traded higher this week as oil prices hovered near 4-month highs. No major economic reports were released during the past week, so a rise in crude prices played a key role in sustaining the Canadian dollar’s strength against its American counterpart. However, next week the focus will return to the Canadian economy, when its central bank will announce its rate decision on Wednesday. Prior to the Bank of Canada’s meeting, readings on August’ manufacturing sales will be released on Tuesday. Economic data on Canadian retail sales and inflation will round up the week for the CAD.

While the Australian dollar closed the week above the flatline, the Kiwi extended losses for the second consecutive week. In the coming week, the New Zealand dollar will take a back seat as only CPI data is due for release. In Australia, the minutes from the last central bank meeting will be released ahead of September data on the labour market. Another set of data releases that are likely to have a significant impact on the Australian dollar include Chinese third-quarter GDP data, as well as Chinese retail sales and industrial production numbers, that are slated to be published on Wednesday.

 

[Option_Banque]

Copper signal by Option Banque

From 2.1130
Till 2.1000

Option Digital
Direction Put
Valid Until GMT 21:00 17/10/2016

 

[Option_Banque]

Daily Report on October 17, 2016 by Option Banque

Daily Report on October 17, 2016

Asian shares retreated on Monday along with oil prices while the U.S dollar held on to its strength against a basket of major currencies. The greenback extended its gains following strong data on U.S retail sales and producer prices for September, that was released on Friday that reinforced expectations of a December interest rate hike by the Federal Reserve.

Also contributing towards supporting the U.S dollar index to seven-month highs, were U.S Treasury yields, that were at over-four-month highs after Federal Reserve Chair Janet Yellen suggested the Fed may allow inflation to exceed its 2 percent target. Higher U.S. bond yields attract more foreign investors, consequently pushing demand for the U.S dollar up.

Fed Vice Chair and FOMC member Stanley Fischer is due to deliver a speech today after the release of September industrial output data, while the earnings season will continue with big names including the U.S’ second largest lender by assets Bank of America Corporation and New York-based technology company International Business Machines Corporation reporting third quarter results today.

Oil prices dropped early on Monday, weighed by rising rig count in the United States. Coming on top of record OPEC-output that triggered renewed fears of global glut, a closely watched report by oil services provider Baker Hughes on Friday showed four oil drilling rigs were added in the week to October 14. This marked the 16th consecutive week of a rise in the oil rig count, which indicates increasing production within the US too.

Elsewhere, Bank of Japan Governor Haruhiko Kuroda said on Monday that the central bank will adjust monetary policy as needed to achieve its 2 percent inflation target. In its monetary policy meeting last month, the BOJ announced a shift in its focus towards interest rates, instead of expanding the monetary base further, after years of massive money printing and asset purchases, which have failed to pull the economy out of stagnation.



Technicals

EURNZD



Fig: EURNZD H4 technical chart

The New Zealand dollar has been on a rally against the Euro for almost a week. The pair has breached the support at 1.55500 on Friday and may make a breakout below the upward sloping support trendline connecting the higher lows. Signaling further down moves, the short-term MA20 has crossed over the long-term MA50 from above. RSI that dipped as low as 31.62 and ADX index that has reached 38.44 consolidated the downside.

Trade suggestion

Buy Digital Put Option from 1.54400 to 1.53400 valid until 20:00 GMT October 17, 2016



GBPJPY



Fig: GBPJPY H4 technical chart

After a period of time moving sideways between the support at 130.000 and the resistance at 132.300, the pair fell out of the range and sustains its down moves. The British Pound has been weighed down by the short-term MA20 and has stayed within the bearish territory for two weeks, as can be seen in the RSI indicator window. The continuation of the downtrend may bring the pair to as low as 125.300.

Trade suggestion

Buy Digital Put Option from 126.500 to 125.300 valid until 20:00 GMT October 17, 2016



AUDUSD



Fig: AUDUSD H4 technical chart

AUDUSD peeked out of 23.6% retracement on Friday but failed to sustain the bullish sentiment to push the pair higher. The Aussie pulled back below this level but bottomed out around 0.75800 and is approaching the 23.6% handle again. RSI is moving sideways above the 50 line, indicating a strong bull in the market. The pair is expected to breach the 23.6% resistance with support from two MAs.

Trade suggestion

Buy Digital Call Option from 0.76200 to 0.76450 valid until 20:00 GMT October 17, 2016



GOLD



Fig: GOLD H4 technical chart

Gold proved to be resilient against the support at 38.2% Fibonacci retracement. The metal did fell below this level twice before but buyers jumped in to buy the dips every time to support the price back up to its range. The price action has crossed over the short-term MA20 and the gold market has entered the bullish zone, as indicated by the RSI chart. Gold may reach the upper boundary at 1265.00 in case the upside extends.

Trade suggestion

Buy Digital Call Option from 1256.00 to 1265.00 valid until 20:00 GMT October 17, 2016



WTI



Fig: WTI H4 technical chart

U.S WTI has been fluctuating widely since it hit the four-month highs at around 51.60. The commodity may resume its downtrend after some corrective moves which brought the pair back to above the 50.00 level, as the short-term MA20 has crossed over the long-term MA50 above. RSI index remains below 50 line and is pointing downwards to the oversold zone, suggesting further declines.

Trade suggestion

Buy Digital Put Option from 50.00 to 49.30 valid until 20:00 GMT October 17, 2016



NASDAQ 100



Fig: NASDAQ 100 H4 technical chart

U.S Nasdaq 100 index has had a choppy trading session last Friday. The price action could not break out of the range between 4750.00 and 4840.00 and had to pull back after hitting the upper boundary. The level at 4840.00 also witnessed a failed attempt of the index to surpass the long-term MA50. A reversal into the downtrend has been confirmed by the stochastic chart where the %K line penetrated the %D line from above.

Trade suggestion

Buy Digital Put Option from 4800.00 to 4750.00 valid until 20:00 GMT October 17, 2016

 

[Option_Banque]

Natural Gas Market Outlook by Option Banque

Mild Weather Neutralizes Future Deficit Scenario. NG Put Options Preferred

Natural gas prices drifted lower on Monday but are trading near the highest since December 2014. The natural gas market seems to be on track to go into a deficit in 2017 as production is not likely to catch up with the rapid pace at which demand is increasing for power generation, global LNG usage, and new industrial demand.

On the supply side, natural gas stocks have increased much more slowly than usual this year. As reported by the U.S. Energy Information Administration (EIA), since the start of May, stocks have risen by less than the five-year average every week. Latest weekly data from the EIA on Thursday reported that natural gas supplies rose 79 billion cubic feet (bcf) for the week ending October 7th.

The increase, which was below analyst estimates that had called for a rise of 87 bcf, sent total stocks to 3.759 trillion cubic feet, up 56 billion cubic feet from a year ago. In late-March, stocks were 1,014 billion cubic feet above prior-year levels. This indicates that the gas market has swung from a huge surplus at the end of the first quarter to near balance at the start of the fourth quarter. If this pace continues, we may witness a potential deficit in 2017, as this year’s winter is forecast to be colder than that of last year.

On the other hand, demand for natural gas this winter will not be from power generators only, as the U.S is ramping up exports of LNG and natural gas through pipelines. Demand from the industrial sector which is taking advantage of cheap natural gas, is also foreseen to boost gas prices in the coming months.

However, in the short-term, the natural gas market is observing a mild start to the heating season as an unusually warm summer and higher than normal temperatures for October have cut heating demand for gas and may cause gas stocks to rise as a result. But in the long run when the winter arrives in full strength, natural gas is expected to jump strongly on the back of a tightening market, that may not be able to smoothly handle any sharp spike in demand.

Fig: Natural gas H4 Technical chart

Natural gas prices have been moving lower since it hit multi-year highs at around 3.350. The price action has crossed over the short-term MA20, which indicates a reversal into a downtrend. However, the support at the 38.2% Fibonacci level and the long-term MA50 are within the sight. Therefore, the downside may be limited. The RSI index is also near the neutral level, which indicates that the market may not become strongly bearish, and may recover after a corrective dip.

Trade suggestion
Buy Digital Put Option from 3.230 to 3.200 valid until 20:00 GMT October 17, 2016

 

[Option_Banque]

McDonald's Trade Idea by Option Banque

McDonalds’ Leads Losses In The Dow – Earnings Reports Awaited

U.S equities fell for the fourth time in the last five trading days, dragged down by declines in energy stocks. U.S benchmarks including the Dow Jones industrial average traded lower on Monday as investors continued to digest the rise in U.S oil drilling rigs and reports confirming OPEC’s record-high output in September.
The Dow Jones index fell 0.32% so far to 18,080.00, with declining issues outnumbering advancing issues by 23 to 7.

McDonald’s led losers as the fast food giant bids farewell to two more longtime executives who are set to depart at the end of the year. The departures of Chief Field Officer Karen King and Senior Vice President of Customer Experience Erik Hess are the latest in a string of executive exits from McDonald’s, which includes the retirement of domestic President Mike Andres and Chief Administrative Officer Pete Bensen.

11 of the Dow Jones’ constituent companies are slated to announce their quarterly earnings over the coming week, with IBM scheduled to report its results after the closing bell on Monday.

Trade suggestion
Buy Digital Put Option from 18082.00 to 18055.00 valid until 20:00 GMT October 17, 2016

 

[Option_Banque]

EUR/CHF signal by Option Banque

EUR/CHF signal by Option Banque

From 1.08790
Till 1.08600

Option Digital
Direction Put
Valid Until GMT 21:00 18/10/2016

 

[Option_Banque]

Daily Report on October 18, 2016 by Option Banque


Daily Report on October 18, 2016

Asian markets nudged higher on Tuesday as oil prices firmed. The US Dollar Index however, weakened after mixed data on Monday and a speech from Federal Reserve Vice Chairman Stanley Fischer that outlined some factors that have been contributing to keeping interest rates low.

In a report released by the Federal Reserve Bank of New York on Monday, data indicated that the manufacturing activity index fell to -6.8 in October, after contracting to -2 in September. The Empire State index turned more pessimistic in October and posted the weakest reading since May, which is unlikely to bolster the case for a rate hike.

U.S shares closed lower on Monday. Anxiety over the U.S presidential election with the last and final presidential debate scheduled on Wednesday, the unclear situation of the Chinese economy, and risks of accelerating inflation raised risk aversion on Wall Street yesterday. Investors can be expected to close out more positions and move to the sidelines today, as a batch of Chinese economic data is slated to be published early tomorrow. The sell-off last week as a result of weak trade data from China trigger a higher degree of risk aversion among investors.

Oil prices rose in early Asian trade today, and the commodity dependent Australian Dollar was helped by the rise in the oil price, as well as the release of the minutes from the RBA's last meeting. According to the minutes, economic expansion is forecast to continue and stimulate job creation which will eventually result in higher wages and reasonable inflation. The Reserve Bank of Australia held rates unchanged at 1.5% in its October meeting and is widely expected to temporarily pause its rate cut plans at its next meeting on November 1st.

The New Zealand dollar also surged today after data showed inflation last quarter was stronger than economists had forecast. Statistics New Zealand reported on Tuesday that consumer prices rose 0.2 percent from the previous quarter, compared with the median forecast for no change in the three-month period until September.



Technicals

USDCAD



Fig: USDCAD H4 Technical Chart

USDCAD has extended its downtrend from as high as 1.33062 recorded last Thursday. The pair has been on track to complete the double top pattern after prices fell below the neck level at 1.31400. The price has broken below the upwards slopping support trendline that connects higher lows, and the short-term MA20 has crossed the long-term MA50 above the price action. The pair is expected to extend its down moves. However, since RSI has neared the oversold zone and the stochastic lines have even entered the oversold territory, a pullback will soon occur.

Trade suggestion

Buy Digital Put Option from 1.30900 to 1.30500 valid until 20:00 GMT October 18, 2016



AUDUSD



Fig: AUDUSD H4 Technical Chart

AUDUSD has been enjoying a strong rally that brought the pair from as low as 0.75058 to surge more than 160 pips to surpass two important Fibonacci levels at 38.2% and 23.6%. On the path higher, the pair fell into a corrective pull back at one time but was supported by the two MAs placed below the price action. The Aussie is facing a firm resistance at 0.76730 which was the shoulder level in the last price cycle. However, with the wide gap between the %K line and the %D line, and an ADX index that has soared to 37.24, a breakout higher is expected.

Trade suggestion

Buy Digital Call Option from 0.76730 to 0.77000 valid until 20:00 GMT October 18, 2016



EURNZD



Fig: EURNZD H4 Technical Chart

EURNZD has fallen below the major support at 1.53400 – the level that has forced the price to reverse higher since late September. However, the pair seems to be attempting to crawl back above this handle as the market has been trapped in the oversold territory for a while. With the ADX at an extremely high level at 62.65, a rebound upwards is anticipated.

Trade suggestion

Buy Digital Call Option from 1.53500 to 1.54775 valid until 20:00 GMT October 18, 2016



SUGAR



Fig: Sugar H4 Technical Chart

Sugar has been trading sideways within a shrinking range. As can be seen from the indicator windows, while RSI has swung back and forth around the 50 line, the ADX has also remained below 20, which indicates no clear trend being formed in the market. However, we can see that sugar has consistently been supported by the long-term MA50 which is placed below the price action. The commodity, as a result, may surge a little higher today.

Trade suggestion

Buy Digital Call Option from 23.20 to 23.50 valid until 20:00 GMT October 18, 2016



BRENT



Fig: Brent H4 Technical Chart

Brent crude has bounced back from the support at 51.30 for the fourth time in nearly two weeks. As can be observed from the chart, lower highs are being formed and every effort by buyers to push the price higher is soon wiped out by the sellers. This suggests that there may be less room to buy or sellers are overshadowing the market currently. Despite recent up moves, the upside seems limited as the price action has hit the resistance zone at the short-term MA20 which is placed above the price action. If the 51.30 level is breached, the commodity may fall to as low as 50.00.

Trade suggestion

Buy Digital Put Option from 51.70 to 51.30 valid until 20:00 GMT October 18, 2016



EURO STOXX 50



Fig: Euro Stoxx 50 H4 Technical Chart

Euro Stoxx 50 index created a gap up on the market open today. We have also received signals for further rallies in the index. Not only has RSI index surpassed the 50-line but the %K line has also penetrated the %D line from below, suggesting upside momentum. Still, the upside is not likely to be strong enough to help the index break out of the recent trading range, whose upper boundary is at around 3038.00.

Trade suggestion

Buy Digital Put Option from to valid until 20:00 GMT October 18, 2016