Daily Market Updates & Trading Signals By Option Banque

[Option_Banque]

GBPUSD Market Outlook by Option Banque

Strong U.K Inflation Magnifies Dollar Weakness – Call Options Suggested On GBPUSD

The British Pound rose against the U.S dollar on Tuesday, looking set to close higher versus the greenback for the fourth session in the last five trading days. The bullish sentiment in GBPUSD has been buoyed by a weaker dollar and U.K inflation data, which was reported to have jumped to its highest in nearly two years.

Data from the Office for National Statistics reported that U.K consumer prices added 1% in September compared to the same month a year ago, following a 0.6% rise in the year to August. The reading outstripped expectations of a rise to 0.9%, and reached the 1% rate for the first time since November 2014. ONS said it did not see explicit evidence of the pound’s weakness in consumer-price changes, but it is affecting producer prices as a cheaper local currency pushes up the price of imported goods in the UK.

The rise in the U.K’s inflationary pressures may drive the Bank of England away from its plan to cut rates in order to protect the economy from headwinds created by the departure of the U.K from the single market. Hence, the possibility of the Cable falling below the 1.20000 level against the US dollar seems to be abating.

Such a possibility may be dampened further based on recent comments by the U.S Federal Reserve, which did not directly reject the likelihood of a U.S rate hike by the year end, but suggested that policymakers may not be as aggressive in increasing interest rate as they were in December 2015.

Fed vice Chair Stanley Fisher on Monday cited rising household savings due to an aging population, weak investment, and a slowing in foreign economic growth as factors contributing towards keeping interest rates low. Additionally, he also said that he didn’t see any threat to financial stability from the currently low rates.
Fisher’s remarks came after Chairwoman Janet Yellen’s speech last week where she stated that she was open to running a “high-pressure economy” with low interest rates.

The U.S dollar consequently fell against most major currencies, and was dragged down further by data released on Monday which showed manufacturing in the New York area contracted further in October. The Empire State index fell deeper into contraction to negative 6.8 from negative 2 in September, marking the weakest reading since May.

Later today, the US will release its own September inflation figures, which are expected to point to an increase compared to the August readings. Better-than-expected numbers will likely fuel hopes of a December hike and therefore boost the greenback.

Fig: GBPUSD H4 Technical Chart

GBPUSD bottomed out near 1.21400 and has rallied since then. The price action crossed over the short-term MA20 which suggests a reversal upwards. The up-moves seem to be stable and durable, as the market has just entered bullish territory. This move is further confirmed by the RSI chart. The pair is very likely to drift higher as the ADX has surged above 20 after a continuous period of retreating lower. A widening gap between +DI line and –DI line helps confirm the rally.

GBPUSD Trade Suggestion
Buy Digital Call Option from 1.23000 to 1.23800 valid until 20:00 GMT October 18, 2016

 

[Option_Banque]

Goldman Sachs Trade idea by Option Banque

Strong Trading Revenue Boosts Goldman Sachs To Multi-Month Highs – Call Options In Demand

Boosted by quarterly earnings that beat expectations, shares of Goldman Sachs Group Inc. surged strongly on Tuesday. The New York-based firm earned a profit of $2.09 billion, or $4.88 a share, up 47% from a profit of $1.43 billion, or $2.90 a share, in the same period last year.

The investment bank continued to maintain a strong run after a slow start to the year. Goldman’s revenue was reported to have grown by 19% to $8.17 billion from $6.86 billion a year earlier. The bank generated the biggest chunk of its revenue from trading, with trading revenue increasing by 17% to $3.75 billion from $3.21 billion in the same quarter a year ago.

Goldman’s chief rival, Morgan Stanley is slated to report results before the market open on Wednesday.

Trade suggestion
Buy Digital Call Options from 172.50 to 173.00 valid until 20:00 GMT October 18, 2016

 

[Option_Banque]

Daily Report on October 19, 2016 by Option Banque


Daily Report on October 19, 2016

China Shows Signs of Stabilization, Oil Up on Failing Supplies

Asian shares surrendered earlier gains as an unexpected slowdown in China’s industrial output overshadow gross domestic product figures that matched economists’ forecast. Chinese National Bureau of Statistics said that the country’s industrial output rose 6.1% in September from a year earlier, down from 6.3% in August and missing estimates of 6.4%.

However, there are still signs of stabilization in China as its economy was reported to expand by 6.7% compared to the same period last year, which is in line with expectations. On a yearly basis, retail sales also observed a rise that beat forecast and was up from August data. Chinese retail sales rose 10.7% in September, topping estimates and August readings which are at the same level of 10.6%.

Oil ticked higher on Wednesday on the back of the American Petroleum Institute’s report that showed crude stockpiles fell 3.8 million barrels in the week to October 14. The decline contrasted with forecast calling for a supply rise. The U.S. Energy Information Administration (EIA) is due to release official fuel storage data later today.

Also in the U.S, the Labor Department on Tuesday reported the consumer-price index increased 0.3 percent in September from the previous month, posting the fastest pace in five months. Compared with September 2015, the cost of living in the U.S. rose 1.5%, the most since October 2014. The report showed that the U.S inflation may be getting closer to the Federal Reserve’s goal thanks to a gradual pickup in housing and energy prices.

Elsewhere, the New Zealand dollar’s rally held on its strength as dairy prices reversed higher after a slump two weeks ago. At the latest Global Dairy Trade auction, the GDT price index gained 1.4% since the last sale early this month. The futures market turned to more tightening after Fonterra said it would reduce the amount of product available for sale at the auction due to lower-than-usual milk volumes for October.



Technicals

AUDNZD



Fig: AUDNZD H4 technical chart

Having reached three-month highs at 1.07632, AUDNZD slid below the 38.2% retracement. A short period of consolidation can be observed when the pair moved sideways above this level, however, the price action eventually crossed over a couple of moving averages and breached the 38.2% handle as well. This suggested a reversal into downtrend. Stochastic lines pointing downwards and ADX soaring as high as 34.38 also consolidates further declines.

Trade suggestion

Buy Digital Put Option from 1.06250 to 1.05750 valid until 20:00 GMT October 19, 2016



EURUSD



Fig: EURUSD H4 technical chart

EURUSD resumed its downtrend after a correction from two-month-and-a-half lows at 1.09631. The pair had to give up its strength after hitting the short-term MA20 at around 1.10090 but has been trading in a thin range for a while. The bear, which is overwhelmingly dominant in the market as indicated by the RSI chart, is expected to sustain its strength after a period of gaining momentum

Trade suggestion

Buy Digital Put Option from 1.09700 to 1.09250 valid until 20:00 GMT October 19, 2016



EURJPY



Fig: EURJPY H4 technical chart

EURJPY has breached the major support at 114.000 after being held above this level for two weeks. The pair has been under aggressively downward pressure created by two MAs hovering above the price action. Sellers continue to dominate the market and may damp the pair lower. EURJPY has penetrated a range that witnessed the pair moving sideways two time previously. If it can break below this trading range, EURJPY may find near-term support at 112.000.

Trade suggestion

Buy Digital Put Option from 113.550 to 112.000 valid until 20:00 GMT October 19, 2016



GOLD



Fig: GOLD H4 technical chart

Gold hit one-week high at around 1265.00 but failed to retain its momentum. The yellow metal has generally been trapped in a trading range between the resistance at 1265.00 and the 38.2% retracement at 1249.76. Although the price action has crossed over the MAs which have converged below the price chart, the upside seems limited. A breakout above the 1265.00 level is not expected today.

Trade suggestion

Buy Digital Put Option from 1260.00 to 1250.00 valid until 20:00 GMT October 19, 2016



BRENT



Fig: BRENT H4 technical chart

The support at 51.30 seems quite resilient as it continued to support the price to trade higher yesterday. In general, the commodity remains moving sideways above this level and under the control of two moving averages hanging above the price action. We are observing Brent struggling with the long-term MA50 again with the RSI pointing to bullish territory. However, to confirm the uptrend, the price action needs to decisively cross over the MA50 first.

Trade suggestion

Buy Digital Call Option from 52.30 to 53.30 valid until 20:00 GMT October 19, 2016



SP500



Fig: SP500 H4 technical chart

SP500 index has crawled back from the handle at 2145.00 for the third time for the past week. The index has turned its old support into a new resistance after it breached through this level on October 11th. The price action has broken above the short-term MA20 but remained under downward pressure from the long-term MA50. The market trend is not clear, which can be observed from the under-20 ADX index and a RSI moving around average level. Considering recent bullish candles that has short bodies and long upper shadows, the market is likely to be favor of the bear.

Trade suggestion

Buy Digital Put Option from 2135.00 to 2123.00 valid until 20:00 GMT October 19, 2016

 

[Option_Banque]

EUR/CAD signal by Option Banque

EUR/CAD signal by Option Banque

From 1.43800
Till 1.43300

Option Digital
Direction Put
Expiry GMT 21:00 19/10/2016

 

[Option_Banque]

FTSE Market Outlook by Option Banque

FTSE 100 Index Declines Amid Disappointing Earnings Results

U.K shares fell in early trade on Wednesday, dragged down by disappointing earnings results and a slight pickup in the British Pound following data over the U.K labor market.

The FTSE 100 index slid 0.12% to 6991.35, moving closer to its 50-day moving average. Shares of Travis Perkins topped the list of decliners on the market, dropping more than 7% after the builder merchant issued a profit warning. The firm said it was closing 30 branches, which will lead to the loss of 600 jobs, due to an “uncertain UK outlook” next year. Travis Perkins forecast its annual adjusted profit for this year may fall below consensus of about £415 million.

Reckitt Benckiser was the runner-up in the race to “biggest loser” title. The consumer goods company’s stocks were down 2.55% after its sales were reported to miss projections for the second straight quarter as demand dropped significantly in Russia and South Korea.

Reckitt Benckiser has faced plummeting sales in South Korea following the deaths of over 100 people which were related to toxic humidifier sanitizers it once sold. Chief Executive Officer Rakesh Kapoor has apologized for the tragedy, but boycotts still cost the company by 1.5 percentage points of its third-quarter sales. Consequences of the case may last longer with further liability resulted from wider legal or governmental investigation, the company said.

Reckitt Benckiser downgraded its full-year sales growth forecast of 4 percent, the low end of its previous projections.

The pound fluctuated on Wednesday after a report by the Office for National Statistics said that the U.K.’s unemployment rate held steady in the three months to August. The jobless rate for the June-August period stood at 4.9%, unchanged from the preceding period, which suggested the labor market was barely affected by the Brexit.

The claimant count which reflects changes in the number of people claiming unemployment-related benefits inched up slightly by 700 in September, significantly less than market’s forecast.

Fig: FTSE 100 H4 Technical Chart

FTSE 100 index fell off from 7000.00 threshold and has crossed over both long-term and short-term moving averages. With lower highs which suggests stronger bears, the index is expected to fall lower. The stochastic chart also consolidates the downtrend with its lines are heading downwards.

Trade suggestion
Buy Digital Put Option from 6988.00 to 6950.00 valid until 20:00 GMT October 19, 2016

 

[Option_Banque]

Canadian Dollar Reverses Lower On The Back Of Potential Stimulus

The Canadian dollar hit one-month high at 1.30048 versus the U.S dollar on Wednesday but had to surrender its gains later after Bank of Canada Governor Stephen Poloz stated that the central bank had “actively” discussed the possibility of injecting more stimulus into the economy.

The Loonie was supported strongly earlier today on the face of the sharp rise in oil prices. U.S crude reached the highest in the last 16 months after the Energy Information Administration reported domestic crude supplies dropped by 5.2 million barrels in the week ended October 14th.

The Bank of Canada decided to hold its benchmark interest rate at 0.5 percent at its monetary policy meeting on Wednesday, but further stimulus were taken consideration in order to “speed up the return of the economy to full capacity”, Poloz said.

Trade suggestion
Buy Digital Call option from 1.31400 to 1.31600 valid until 20:00 GMT October 19, 2016

 

[Option_Banque]

USD/CHF Signal by Option Banque

USD/CHF Signal by Option Banque

From 0.99050
Till 0.99200

Buy Option Digital
Direction Call
Expiry GMT 21:00 20/10/2016

 

[Option_Banque]

Daily Report on October 20, 2016 by Option Banque


Daily Report on October 20, 2016



Asian equities advanced along with the Mexican peso on the back of the third and final U.S presidential debate which was widely considered as another victory for the Democrat nominee Hillary Clinton. The latest debate between Clinton and her rival, Republican Donald Trump, did not move the financial markets as much as the previous two direct debates because there was nothing that could significantly change the prospects of Clinton’s winning the election in November.

Crude prices were almost unchanged on Thursday after surging vigorously on Wednesday due to an unexpected drop in American stockpiles. Official data by the U.S Energy Information Administration on Wednesday showed U.S. supplies dropped by 5.25 million barrels last week to the lowest level since January. Analysts had forecast an increase.

The Australian dollar dropped versus all major currencies after jobs data showed an unexpected decline in the labour market. In early Asian trading hours, the Australian Bureau of Statistics reported that job creation fell by 9,800 in Australia in September, completely contrasting with forecasts by economists which had called for an increase of 15,200 new jobs added last month.

The jobless rate fell to 5.6% from a revised 5.7% in August as a result of the fact that fewer people participated in the labor force. According to the report, Australia’s participation rate for September dropped from 64.7% to 64.5%, the lowest level in almost two years.

The Euro also hovered near its weakest since July 25th ahead of the European Central Bank policy meeting scheduled later today. Although no changes are expected to the ECB’s interest rates, markets will looking out for clues regarding the future plans for the central bank’s quantitative-easing program.



Technicals

AUDUSD



Fig: AUDUSD H4 Technical Chart

AUDUSD had broken through the resistance at 0.76880 before reaching over-two-month highs at 0.77339 earlier this week. Since then the pair has been falling back and the decline has pushed the price action to cross below the short-term MA20. As can be seen from the ADX chart, the strength of the previous rally has been weakening and the –DI line has crossed the +DI line, which suggests a reversal into a downtrend. The pair may find some support at 23.6% Fibo level.

Trade suggestion

Buy Digital Put Option from 0.76500 to 0.76150 valid until 20:00 October 20, 2016



USDCAD



Fig: USDCAD H4 Technical Chart

USDCAD broke though the support at 1.30500 yesterday to re-attempt a test of the one-month low at 1.30048. However, the pair soon regained its bullish momentum and reversed higher from this support zone. The USDCAD has slid around 300 pips from as high as 1.33062 logged one week ago. As a result bears seem exhausted and could not sustain the strength to push the market through the 1.30000 handle. Bulls consequently stepped in to push the market back into bullish territory.

Trade suggestion

Buy Digital Call Option from 1.31700 to 1.32100 valid until 20:00 October 20, 2016



AUDNZD



Fig: AUDNZD H4 Technical Chart

AUDNZD dropped through the support at the 38.2% level yesterday before a mild recovery. However the market has broken through this support again today. The pair has moved back and forth around this level for two days before decisively leaving this handle behind. As can be observed from the chart, the MA20 has converged with the MA50 from above, which indicates more declines to come.

Trade suggestion

Buy Digital Put Option from 1.05700 to 1.05000 valid until 20:00 October 20, 2016



Brent



Fig: BRENT H4 Technical Chart

Brent’s price action penetrated the two moving averages from below yesterday, after having been restrained below these two dynamic resistance points since last week. The market has pulled back a little bit as a result of profit taking, but is expected to resume the uptrend soon as the prices are approaching the support zone near the two MAs again and may turn these MAs into new zones of solid support.

Trade suggestion

Buy Digital Call Option from 52.00 to 53.00 valid until 20:00 October 20, 2016



Natural Gas



Fig: Natural Gas H4 Technical Chart

Natural fell sharply to as low as 3.142, breaching the 38.2% Fibonacci retracement level at 3.188 before pulling back. The possibility for the price to get back above this 38.2% level seems low as the market is still in the bearish zone. Coupled with the two MAs placed above the price action, the 38.2% handle is expected to be a strong zone of resistance that may push the price to reverse lower.

Trade suggestion

Buy Digital Put Option from 3.160 to 3.070 valid until 20:00 October 20, 2016



DOW JONES



Fig: DOW JONES H4 Technical Chart

U.S Dow Jones futures closed higher on Thursday but have retreated in overnight trading. The index had to give up its gains as it failed to break through resistance marked by the convergence between the upward sloping trendline that connects higher lows in September and higher highs since the start of this month. The recent rally pushed the price to a retest of the one-week highs at 18244.00 and pushed the price action to cross above the two MAs. Alongside the support from MAs, higher lows created in the price action suggest a coming breakout through the trendlines.

Trade suggestion

Buy Digital Call Option from 18250.00 to 18330.00 valid until 20:00 October 20, 2016

Buy Stop at 18250.00, Take profit at 18330.00, Stop loss at 18174.00

 

[Option_Banque]

Gold Market Outlook by Option Banque

Gold Is Strong, But The U.S Dollar Is Stronger – Put Options Suggested

Gold prices reversed lower on Thursday, after having been surging for three days in a row. The precious metal had been in a good mood with strong festival demand from India, but its strength could not knock down a rising U.S dollar. A firmer greenback is typically bearish for gold, as it leaves the dollar-priced asset less desirable to buyers holding other currencies.

The yellow metal had risen to as high as $1274.58 per ounce – the highest since October 5th amid mounting physical gold demand from India – the world’s second largest gold consumer. According to market sources, Indian imports are likely to hit a nine-month high in October as its domestic market started trading in a premium.

India’s overseas purchases of gold likely reach 60-70 tons, the highest since January and more than double an estimated 30 tons in September. Last month, gold traded in a discount (Indian dealers offered gold below the official domestic price) owing to weak demand and smuggling issue which results from the continuation of the 10% customs duty on import of gold bars.

However, a flip in domestic prices to a premium ahead of a seasonal pickup in consumption prompted banks and refiners to resume imports. Demand for the precious metal in India usually gears up in the fourth quarter as this is the time of wedding season and festivals such as Diwali and Dussehra.

Gold prices would remain on their track of rising if it was not because the U.S dollar became stronger. The buck gained versus euro following comments by the European Central Bank President Mario Draghi that the ECB had neither discussed about an extension of its bond-buying program beyond March 2017, nor tended to stop its QE program without tapering its first.

The dollar index, which measures the strength of the U.S dollar versus a basket of major peers, rose 0.45% to 98.28.

Fig: GOLD D1 technical Chart

Gold trimmed its three-day-long rally to head back to 38.2% Fibonacci retracement at 1249.73. The gold market has escaped from the oversold zone but still remains in the bearish territory. Gold may fall deeper as downward pressure are still being exerted by two moving averages hanging above the price chart.

Trade suggestion
Buy Digital Put Option from 1265.00 to 1260.00 valid until 20:00 GMT October 21, 2016

 

[Option_Banque]

EUR/USD Trade Idea by Option Banque

No Prospect For QE To End Soon – EURUSD Nose-Dives To Four-Month Lows

The euro collapsed against its American counterpart in a volatile trading day on Thursday. The pair hit the intra-day high at $1.10386 before falling to $1.09198 – the lowest since June 24. The European Central Bank has kept its interest rates unchanged and also made no adjustment on its quantitative-easing program in its last policy meeting as initially expected by markets.

However, in the press conference which came after the rate decision, the ECB President Mario Draghi said that the central bank had not discussed about an extension of its bond-buying program beyond March 2017, and that the ECB would not stop its QE program without tapering its first.

Given Draghi’s comments that the risks are to the downside, and his concerns about subdued foreign demand, ECB’s current stimulus measures may not end before its initial schedule.

Trade suggestion
Buy Digital Put Option from 1.09275 to 1.09090 valid until 20:00 GMT October 20, 2016

 

[Option_Banque]

Daily Report on October 21, 2016 by Option Banque

Daily Report on October 21, 2016



Asian shares trimmed its three-day streak of gains as investors digested the last round of earnings reports, while a firmer dollar weighed on crude prices. Yesterday, U.S stocks finished lower after a choppy session also because of a sharp drop in telecoms which resulted from disappointing third-quarter performances of big names such as Verizon and AT&T, and falling oil prices.

The greenback held near seven-month highs on Friday, looking set to end the week higher against a basket of six major currencies, as euro plunged sharply following comments by the European Central Bank President Mario Draghi that the quantitative easing program would not end before March 2017. President Draghi stated that the central bank had not discuss about tapering its 1.7 trillion euro ($1.86 trillion) asset-buying program, regarding a slow rise in inflation and risks from foreign weak demand.

Moving on to the U.S, data on Thursday showed that the country’s home sales swung back into monthly expansion in September after two straight months of declines. Report from the National Association of Realtors indicated existing home sales in the U.S surged to 5.47 million last month from a downwardly revised 5.30 million in August.

Out in Japan, Bank of Japan Governor Haruhiko Kuroda said the central bank may push back the timing for the economy to hit the 2% inflation target at November’s rate review. Speaking in parliament on Friday, Kuroda said that given recent weakness in core consumer prices, the BOJ may have to cut its inflation forecast at the next meeting, but he also expected an acceleration in Japanese economy next fiscal year due to brightening prospects for global growth.



Technicals

USDCHF



Fig: USDCHF H4 Technical Chart

USDCHF has retested nearly five-month high at 0.99550 and is approaching the 61.8% Fibonacci retracement at 0.99886. ADX is surging, with wide gap between the +DI and –DI line. Coupled with the RSI index which is pointing upwards, two MAs moving below the price action are supporting for the uptrend.

Trade suggestion

Buy Digital Call Option from 0.99550 to 0.99880 valid until 20:00 GMT October 21, 2016



CADJPY



Fig: CADJPY H4 Technical Chart

CADJPY has been on a steady downtrend since the pair crawled back from over-one-month high at 79.648. The pair has fallen back in the trading range from 78.000 and 78.870. The pair is likely to hit the lower boundary at 78.000 but it remains uncertain for the price to break below that level as the market has neared the oversold zone.

Trade suggestion

Buy Digital Put Option from 78.310 to 78.000 valid until 20:00 GMT October 21, 2016



AUDNZD



Fig: AUDNZD H4 Technical Chart

AUDNZD has risen from the lowest since October 10th. The price action has penetrated both the short-term and long-term MAs, consolidating the uptrend. The Aussie has surpassed the 38.2% level and RSI index has just confirmed upbeat moves by soaring above the 50 line.

Trade suggestion

Buy Digital Call Option from 1.06640 to 1.06940 valid until 20:00 GMT October 21, 2016



GOLD



Fig: GOLD H4 Technical Chart

The level at 1275.00 continued to be a tough handle to the precious metal. Gold has pulled back from this resistance yesterday and also reversed lower after hitting this level on October 5th. While the price action has crossed over the short-term MA20, which is a signal suggesting a reversal into downtrend, the RSI index has confirmed the down moves by falling back into the bearish territory.

Trade suggestion

Buy Digital Put Option from 1261.00 to 1256.50 valid until 20:00 GMT October 21, 2016



BRENT



Fig: BRENT H4 Technical Chart

Brent bounced back against the support at 51.30 one more time after retreating from as high as 53.12 logged on Wednesday. The level at 51.30 has been a firm support for the commodity for more than 2 weeks. The crude price is expected to soar higher as buyers stepped in to buy the dips at psychological support.

Trade suggestion

Buy Digital Call Option from 51.45 to 52.10 valid until 20:00 GMT October 21, 2016



DAX



Fig: DAX 30 H4 Technical Chart

German Dax 30 has breached out of the range between the support at 10600.00 and the resistance at 10700.000 and seems to keep on surging. The index fell to as low as 106592.70 yesterday but was supported by the short-term MA20 to reverse higher. RSI is still remaining in the bullish zone and pointing upwards, indicating an overwhelming dominant bull in the market.

Trade suggestion

Buy Digital Call Option from 10725.00 to 10770.00 valid until 20:00 GMT October 21, 2016

 

[Option_Banque]

Natural Gas Trade Idea by Option Banque

Warm Autumn Diminishes Heating Demand, Rising Storage Worsens Gas Market

Natural gas prices has fallen for five out of the last six trading days, as unusual
warm weather in October and swelling stockpiles continued to depress the market. The commodity extended its losses, hitting a two-week low at $3.078 per million Btu on Friday.

The U.S. Energy Information Administration on Thursday said natural gas stockpiles grew by 77 billion cubic feet last week, which was higher than expectations for an increase of 73 bcf.

Adding to natural gas’s woes, warmer-than-normal autumn this year has set a mild start to the heating season. Weather forecast indicates warm temperatures will last until November. Hence, heating demand for natural gas may continue to slide in the coming weeks.

Natural Gas Trade Suggestion
Buy Digital Put Option from 3.100 to 3.080 valid until 20:00 October 21, 2016

 

[Option_Banque]

GBP/USD signal by Option Banque

GBP/USD signal by Option Banque

From1.22130
Till1.21550

Option Digital
Direction Put
Expiry GMT 21:00 21/10/2016

 

[Option_Banque]

USD/CAD Market Outlook by Option Banque

Canadian Dollar Stumbles As Weak Data Fuels BOC Rate Cut

The Canadian dollar plunged to the lowest since mid-March against the U.S dollar after a batch of data that showed retail sales unexpectedly dropped in August while consumer prices accelerated at a slower-than-forecast pace last month.
The Loonie hit an intra-day low at 1.33500 per dollar and is on track for the biggest weekly loss in the last five months as data released by the Statistics Canada before the opening bell of the U.S session strengthened the case that Bank of Canada will soon cut its interest rate.

Canadian consumer prices were reported to rise 0.1% in September after two months of declines. However, the data was weaker than expectations of economists who forecast prices would increase 0.2% on the month. On a yearly basis, Canada’s CPI added 1.3%, missing forecast by 0.2% as weak food prices dragged the index lower.

The so-called core inflation which measures the change in the price of goods and services purchased by consumers, excluding the 8 most volatile items, added 0.2% on the month and ticked up 1.8% from the September 2015.

In a separate report by the Statistics Canada, retail sales were shown to fall 0.1% in August, marking a retreat for a third straight month. Market expectations were for a 0.3% gain. The drag were caused by lower sales of new and used cars and a decline in purchases at general merchandise stores. Excluding automobiles, retail sales were unchanged from the previous month.

The Loonie has been on a slide since Wednesday when the BOC decided to keep rates unchanged but signaled the possibility of more stimulus measures injected into the economy. Given the likelihood of the U.S Federal Reserve to raise rate by the end of this year, the pair USDCAD may surge higher due to the divergence of monetary policy between two central banks.

However, the movement of the Canadian dollar also hinges on the oil market. Investors are waiting for the next formal meeting between OPEC and non-OPEC producers to discuss about the details of the output cut plan. Specific quota for each oil producer is expected to be set in the meeting this November.

Fig: USDCAD D1 technical chart

USDCAD has come back to trade above the upwards slopping trendline connecting higher highs since September 07th. The pair breached below this support on September 13 and fell to as low as 1.30048 on Wednesday but soon reclaimed its strength. A major Fibonacci level has been challenged. The pair has surpassed the 38.2% retracement and my successfully break out of this level as RSI has soared to as high as 61.29.

Trade suggestion
Buy Digital Call Option from 1.33350 1.33500 to valid until 20:00 GMT October 24, 2016

 

[Option_Banque]

Daily Report on October 24, 2016 by Option Banque


Daily Report on October 24, 2016

The U.S dollar edged up versus all of its major peers, reaching a fresh eight-month high against a basket of six currencies on Monday. Expectations that the U.S Federal Reserve will raise interest rate by the end of this year were further buoyed by San Francisco Fed President John Williams, whose remarks pointed to a hawkish tone. Speaking on Friday at a mortgage conference, President Williams stated that the Fed should increase rates gradually, “preferably sooner rather than later”.

According to data from the Commodity Futures Trading Commission released on Friday, speculators increased their net long position on the dollar to $18.44 billion in the week ended Oct. 18, from $14.72 billion the previous week. That was the fourth consecutive week that investors have raised their bets on the greenback, which sent the currency’s net long positions to the highest since late January.

Meanwhile, Japan’s Ministry of Finance reported on Monday that Japanese exports fell 6.9% in September from a year earlier. The rally in the Yen undermined export prices and extended the export decline for a 12th straight month. However, exports rose 4.7% in terms of volume in the year to September, thanks to Asian demand for iPhone-related parts, and car sales in Europe.

Also in Japan, Markit Flash Manufacturing PMI for October was reported to tick up to a seasonally adjusted 51.7 – the fastest pace in nine months, led by mounting new orders. The Bank of Japan will hold its policy meeting on November 1st, and is expected to make no changes to its current stimulus program.

Crude oil prices fell at the start of the new week after Iraq’s oil minister Jabar Ali al-Luaibi said on Sunday that the nation should be exempted from production cuts proposed by the Organization of Petroleum Exporting Countries. Citing the war with Islamic militants that Iraq is struggling with, as the reason, Luaibi claimed the same exemption as other OPEC-members Nigeria and Libya.



Technicals

EURAUD



Fig: EURAUD H4 Technical chart

After having swung back and forth around the 38.2% level at 1.46850 for two weeks, EURAUD eventually breached below this handle on October 10 and has been under downward pressure from the two MAs placed above the price action since then. Staying in a bearish market as indicated by the RSI chart, the pair is approaching the 50.0% retracement at 1.40994.

Trade suggestion

Buy Digital Put Option from 1.42500 to 1.40100 valid until 20:00 GMT October 24, 2016



AUDJPY



Fig: AUDJPY H4 Technical chart

As can be observed from the chart, AUDJPY has been on a rise for almost a month. After a correction that sent the pair from three-month highs at 80.000 to as low as 78.710, the Aussie pulled back against the Japanese Yen from the upward sloping trendline that connects higher lows since September 27. The resistance at the 23.6% retracement level is within sight.

Trade suggestion

Buy Digital Call Option from 79.250 to 79.600 valid until 20:00 GMT October 24, 2016



USDCAD



Fig: USDCAD H4 Technical chart

USDCAD retreated from over-six-month highs at 1.33550 after surging sharply from as low as 1.30048 logged last Wednesday. The pair has broken the 38.2% level at 1.33111 and may turn this major Fibonacci retracement into its new support level, as the recent decline is expected to be a short correction after the market entered into the overbought zone.

Trade suggestion

Buy Digital Call Option from 1.33111 to 1.33550 valid until 20:00 GMT October 24, 2016



GOLD



Fig: GOLD H4 Technical chart

Gold has been trading in a thin range around the 23.6% handle at 1264.73. The precious metal attempted to break below the 23.6% level but the short-term MA20 is fueling bullish momentum in the gold market. The RSI has also failed to move past the 50 line, suggesting strong bulls in the market.

Trade suggestion

Buy Digital Call Option from 1267.50 to 1275.00 valid until 20:00 GMT October 24, 2016



WTI



Fig: WTI H4 Technical chart

U.S crude prices are moving sideways under the 20-period moving average. The two MAs have turned into dynamic resistance after the price action crossed below them from above. As can be seen from the Stochastic chart, the %K line has penetrated the %D line from north to south, indicating a reversal into downtrend. In the event of continual downward pressure being exerted by the two MAs, WTI prices may stumble to as low as 49.35 - the lowest since October 13th.

Trade suggestion

Buy Digital Put Option from 50.55 to 49.35 valid until 20:00 GMT October 24, 2016



NASDAQ 100



Fig: NASDAQ 100 H4 Technical chart

The Nasdaq 100 index created a gap up on the market open on Monday and looks set to retest the highest level since October 18th at 4861.00. The price action has crossed through the two moving averages from below, suggesting an uptrend. With the confirmation from the RSI index that has soared to as high as 57.98, the Nasdaq 100 may face resistance at 4880.00

Trade suggestion

Buy Digital Call Option from 4861.00 to 4880.00 valid until 20:00 GMT October 24, 2016

 

[Option_Banque]

FTSE Market Outlook by Option Banque

FTSE 100 Approaches 7000.00 Threshold Again – Where The Price Will Go?

U.K stocks pared early gains on Monday after a set of upbeat European data confirmed that mainland European equities are outperforming their U.K. counterparts. Given negative pressures on British shares from rising gilt yields and the risks of banking exodus if the U.K opts for a “hard” Brexit, FTSE 100 index retreated despite gains in easyJet PLC

The FTSE 100’s best performance today belonged to low-cost airline easyJet PLC. Shares of this company rallied 2.78% after being upgraded to buy from neutral at Swiss lender UBS, which said that easyJet’s stocks “have materially de-rated and we think [they] look attractive.”

Media shares also rose on Monday, with ITV PCE adding 2.25% and Sky PLC gaining 0.24%, supported by news from the US that the multinational telecommunications conglomerate AT&T had agreed to buy Time Warner for $85.4 billion. The takeover has raised the prospect of similar consolidation in Europe.

Thanks to rising metal prices, mining companies received a boost in morning session. Copper mining company Antofagasta was up 2.4% and BHP Billiton added 1.9%, Rio Tinto PLC gained 0.77%.

On the losing side, pharma giants Shire and AstraZeneca topped the list of losers, down 1.42% and 1.27% per share respectively. Another market mover is Royal Bank of Scotland PLC, which fell 1.0%, as the bank’s rating was downgraded to sell from hold.

Like the German Deutsche Bank, RBS is in discussions with U.S. authorities related to a potential settlement over alleged mis-selling of mortgage-backed securities.

In general, at the time of writing, advancing issues outnumbered declining issues by 63:37 on the FTSE 100 index.

Fig: FTSE 100 D1 technical chart

FTSE 100 index has been moving in a thin range around the 7000.00 threshold for more than a week. As we can see from the chart, prices are being supported by the short-term DMA20 as well, which consistently boosted the index higher last week. With RSI indicator remains in the bullish zone, FTSE is expected to reverse higher once it hit the 7000.00 support again.

FTSE Trade Suggestion
Buy Digital Call Option from 7000.00 to 7035.00 valid until 20:00 GMT October 24, 2016

 

[Option_Banque]

USD/CAD signal by Option Banque

USD/CAD signal by Option Banque

From 1.33550
Till 1.34400

Buy Option Digital
Direction Call
Expiry GMT 21:00 24/10/2016

 

[Option_Banque]

Natural Gas Trade Idea by Option Banque

Natural Gas Hits Five-Week Lows – Put Options Suggested As Warmer Weather Curtails Demand

U.S. natural gas futures dropped to the lowest level since September 09th at $2.851 per million Btu on Monday. The slide was due to forecasts that the weather will be warmer than usual across the US this fall and winter.

According to the Weather Company, temperatures in the U.S will probably be above normal in the central part of the U.S. from Oct. 29 through Nov. 7, which has spurred concerns that a mild winter will lessen demand for the heating fuel.
Weather forecasts also reported that except for the Southeast, most parts of the U.S will experience warmer than usual weather in November and the situation may last through January. Although demand for natural gas from power plants is rising, stockpiles are above normal and a mild winter is expected to worsen the glut.

Natural Gas Trade Suggestion
Buy Digital Put Option from 2.870 to 2.840 valid until 20:00 GMT October 24, 2016

 

[Option_Banque]

Third-Quarter GDP Reports In Focus, Will U.S Dollar Sustain Its Strength Next Week?

Third-Quarter GDP Reports In Focus, Will U.S Dollar Sustain Its Strength Next Week?

The U.S dollar was a star last week, as the monetary policy divergence between the U.S Federal Reserve and other major central banks sent the greenback higher against most of its peers.

The dollar strengthened after New York Fed President William Dudley on Wednesday said that the U.S. central bank will likely raise interest rates later this year if the economy remains on its current trajectory. Furthermore, expectations that Hillary Clinton will win the U.S. presidential election grew strongly after her victory in the third and final U.S presidential debate. This also added to the view that a December rate hike is likely. Fed will hold its next meeting in November. Still, a rate hike ahead of the presidential election is considered as unlikely.
Expectations for higher rates typically boost the dollar by making it more attractive to yield seeking investors. However, it would be misjudged if we didn’t mention the slump of the euro when it comes to the greenback’s strength.
The euro plunged sharply on Friday following comments by the European Central Bank President Mario Draghi that the quantitative easing program would not end before March 2017. President Draghi stated that the central bank had not discuss about tapering its 1.7 trillion euro ($1.86 trillion) asset-buying program, regarding a slow rise in inflation and risks from foreign weak demand.

A string of data for the Euro area will be released next week. The single currency will start its volatility on Monday with Markit flash PMIs for key Eurozone countries (Germany and France) as well as for the whole region. The German Ifo survey out on Tuesday is expected to show a slight improvement in the current conditions index. More economic data for the 28-nation bloc will follow on Friday with the Eurozone’s economic sentiment index and preliminary German inflation numbers.

Following a conference following the policy reviews last Thursday, ECB President Mario Draghi will have another speech about “Stability, Equality and Monetary Policy” on Tuesday.

In the U.S, the most important statistic is probably the release of third quarter growth on Friday. However, other economic parameters such as durable goods orders, housing data and business surveys will keep traders occupied until the key Friday’s Advance GDP, which is forecast to post at the highest since the last quarter of 2014.

If the preliminary third quarter GDP data meets economists’ expectation of a substantial growth rate of 2.5% in the third quarter, the US economy will have a well performance during the second half of the year given the weakness that occurred during the first six months of 2016. Strong economic growth and an improving labor market will give the Fed fewer reasons to delay a rate increase in December.

The Pound ended last week higher versus the U.S dollar thanks to the U.K inflation data, which was reported to have jumped to its highest in nearly two years.

Data from the Office for National Statistics reported that U.K consumer prices added 1% in September compared to the same month a year ago, following a 0.6% rise in the year to August. The reading outstripped expectations of a rise to 0.9%, and reached the 1% rate for the first time since November 2014. ONS said it did not see explicit evidence of the pound’s weakness in consumer-price changes, but it is affecting producer prices as a cheaper local currency pushes up the price of imported goods in the UK.

The rise in the U.K’s inflationary pressures may drive the Bank of England away from its plan to cut rates in order to protect the economy from headwinds created by the departure of the U.K from the single market.

For next week, like the U.S., the U.K. will also announce its preliminary growth estimate for the third quarter, which is due on Thursday. The data will be of more importance than usual as they are for the three months immediately following the Brexit referendum on June 23. . Growth is expected to slow to 0.3% quarter-on-quarter in the three months to September from the previous quarter’s 0.7% rate. Consensus data suggested that the impact of Brexit may not be felt much, as strong consumer spending and a weaker pound have kept the UK economy in a better mood than initially expected . A strong number would damp the need for further easing by the BOE.

The Australian dollar was almost unchanged compared to the level at the start of last week after the market close on Friday. The Aussie stayed strong on the first half of the week through October 21st after 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.

However, the bullish sentiment left the Aussie on Thursday after jobs data showed an unexpected decline in the labour market. In early Asian trading hours, the Australian Bureau of Statistics reported that job creation fell by 9,800 in Australia in September, completely contrasting with forecasts by economists which had called for an increase of 15,200 new jobs added last month.

The jobless rate fell to 5.6% from a revised 5.7% in August as a result of the fact that fewer people participated in the labor force. According to the report, Australia’s participation rate for September dropped from 64.7% to 64.5%, the lowest level in almost two years.

Next week, AUD investors will put their focus on the inflation data due on Wednesday as it could determine whether the Reserve Bank of Australia decides to cut rates anytime soon. CPI in the third quarter is expected to pick up slightly to 0.5% on a quarterly basis and to 1.1% on a yearly basis.

The New Zealand dollar also traded lower against the greenback last week. However, the Kiwi outperformed its Australian counterpart due to upbeat inflation and consumer prices. Next week will be quiet for the currency as only New Zealand’s trade balance is on the calendar.

Canadian dollar plunged the most in the trio of commodity currencies. Retail sales continued to decline while consumer prices grew less than expected. Bank of Canada Governor Stephen Poloz stated that the central bank had “actively” discussed the possibility of injecting more stimulus into the economy.

The Bank of Canada decided to hold its benchmark interest rate at 0.5 percent at its monetary policy meeting on Wednesday, but further stimulus were taken consideration in order to “speed up the return of the economy to full capacity”, Poloz said.

With the lack of Canadian data next week, oil will continue to be a key driver of the currency’s flows.

 

[Option_Banque]

AUD/JPY signal by Option Banque

AUD/JPY signal by Option Banque

From 79.810
Till 80.000

Buy Option Digital
Direction Call
Expiry GMT 21:00 25/10/2016