Daily Market Analysis by CapitalStreetFX

[CSFX.Support]

EURUSD Market Outlook by Capital Street FX

EURUSD Longs In Play As ECB Powers Market Higher – Upside Limited

EURUSD rose in the early European trading session on Friday, heading for a higher weekly closing for the first time in the last three weeks. The burden of a widely expected extension to the Eurozone’s asset purchasing program was taken off the Euro, which seems to be outweighing any negative impact from today’s weaker-than-expected data on the single currency.

German Trade Balance Data for July that was reported earlier, came out with a lower than expected reading. According to the Federal Statistical Office, Destatis, Germany’s trade surplus for July fell to 19.4 billion euros ($21.9 billion) from a revised 21.4 billion euros in June, missing the forecasts for a surplus of 22.7 billion euros.

In seasonally-adjusted terms, exports slipped by 2.6% from one month earlier and 10% compared to a year ago, while imports dropped by 0.7%. Subsequently, Germany’s current account balance showed a surplus of only 18.6 billion euros in July, well below expectations for a reading of 22.9 billion euros. The large contraction in July 2016’s data compared to the same month last year was in part because of July 2015 being among the strongest months of the entire 2015 for German exporters.

Today, France’s National Institute of Statistics and Economic Studies (INSEE) reported that the country’s industrial production dropped unexpectedly in July. Industrial production in the EU’s second-largest economy fell by 0.6% in July, following a 0.7% decline in June. In particular, manufacturing of equipment skid by 3.3% on a month on month basis, in July, and production of transport materials lost by 1.4%.

The euro seemed resilient after the data releases, as at the moment, the shared currency is not under any threat of rate cuts or any other upcoming stimulus measures. The European Central Bank decided to leave interest rates unchanged on Thursday as expected but disappointed the markets with no explicit guidance about the central bank’s next moves.

Speaking at the press conference after the rate decision, ECB President Mario Draghi stated that the bank was studying potential changes to its asset-buying program, and maintained the March 2017 end-date for the ongoing program. However, he also reiterated the current risk to inflation and reassured markets that “If warranted, we will act by using all the instruments available within our mandate.”

Investors are shifting their focus now to the meeting of the U.S Federal Reserve later this month. Despite a chorus of Fed officials including President Janet Yellen and her top Deputy Stanley Fisher signalling that the time to hike rates is approaching as the economy is at or near the full-employment level, investors have trimmed bets that the Fed would be raising rates as early as this month, especially after recent data echoing the disappointment of a smaller-than-expected NFP last Friday.

EURUSD has been receiving huge support from both the 20-day and 50-day MA’s that were intercepted by the price action from below, earlier in the week. Both the MA’s are now placed below the price action and underpinning the current up-move. While the long-term moving average played an important role in supporting the market last week, the short term MA is currently acting as a handle that forces the euro to reverse higher, on every attempt to test it. The market has entered the bullish zone and set the stage for further advances. Nonetheless, the uptrend seems to be limited as a downward sloping trendline connecting the highs from earlier in the year, is currently weighing on the price action.

Trade suggestion

Buy Stop at 1.12740, Stop loss at 1.12278, take profit at 1.13100

 

[CSFX.Support]

AUD/USD signal by Capital Stree FX

AUD/USD signal by Capital Stree FX

FromGMT 14:00 09/09/2016
TillGMT 21:00 09/09/2016

Buy at 0.75810
Take profit at 0.76140
Stop loss at 0.75610

 

[CSFX.Support]

P500 Trade Idea by Capital Street FX

U.S Stocks Nose-dive, Weighed By Fears of Rate Increase and Tumbling Crude Prices

Sp500 index has witnessed the biggest losing session on Friday since June 27 when the benchmark dropped more than 1%. Investors were rattled by hawkish comments by Federal Reserve officials that backed a U.S. interest rate hike while a slump in crude prices dragged down energy sector.

Boston Fed President Eric Rosengren, who is a voting member of the Fed’s policy committee and therefore will have a vote in the Fed’s decision, stated on Friday that “based on data that we have received to date…a reasonable case can be made for continuing to pursue a gradual normalization of monetary policy”.

None of 10 S&P500 sectors traded in the green. Two worst performers are utilities and telecoms that were both down around 3%. Energy shares, dropped 2.1 percent, due to more than 3% decline in crude prices.

Trade suggestion

Buy Limit at 2120.00, Take profit at 2125.30 , Stop loss at 2104.15

 

[CSFX.Support]

Fed Speak Causes Friday SellOff, BOE Under Spotlight In Coming Week

Fed Speak Causes Friday SellOff, BOE Under Spotlight In Coming Week

The past week, especially Friday, was good for the U.S dollar on the one hand, but on the other hand, turned out to be a nightmare for the equity and bond markets. While the greenback advanced against most of its peers, fueling the dollar index to a higher close, settling at 95.38, up 0.38% on the day. European and U.S stocks however, posted their biggest daily losses since the Brexit selloff.

The Dow Jones fell 2.1%, to 18085.45, S&P 500 declined 2.45% to 2127.81, and Nasdaq Composite lost 2.54% to close at 5215.91, after European shares finished the week lower. The U.K.’s FTSE 100 was down 1.19% over the week, while the French CAC index and the German DAX ended the Friday session around 1% lower.

Revived speculation over a U.S interest rate increase as soon as this month helped boost the dollar and created fears of a trend towards tightening monetary policy that would negatively impact investors holding shares in general and shares of dividend payers like utilities and telecommunications companies, as the opportunity cost of holding shares increases.

Among comments made by Fed officials on Friday, statements by Boston Fed President Eric Rosengren, heightened market volatility the most. Rosengren is a voting member of the Fed’s policy committee and therefore will have a say in the Fed’s decision.

Having advocated low rates in the recent past, and widely considered to be a dovish member, Rosengren stated that “based on data that we have received to date…a reasonable case can be made for continuing to pursue a gradual normalization of monetary policy”. The FOMC voter echoed hawkish statements by other Fed Members recently, by warning over the risks of waiting too long to tighten and confirmed that the economy is performing quite well with the labor market nearing full-employment and inflation slowly returning towards the 2% target.

Until the monetary policy meeting scheduled on September 20-21, there will be only one more speech by any Fed Member ahead of the blackout period for public comments by Fed Members. The central bank’s most dovish official, Governor Lael Brainard, will be delivering a previously unannounced speech on Monday at The Chicago Council on Global Affairs.

Last week, three central bank meetings were concluded with no new policy changes announced. Reserve Bank of Australia decided to stand pat on interest rates on Tuesday and Bank of Canada maintained its overnight rate at 0.5% as anticipated, but the European Central Bank disappointed markets even though it left the rates unchanged.

The ECB had been expected to extend its asset purchase program of buying €80 billion worth of bonds a month, beyond the March 2017 end-date, but ECB President Draghi stated that policy makers didn’t even discuss any fresh stimulus measures and gave no explicit guidance about the central bank’s next moves.

Eurozone data released in the past week was disappointing – with service-sector activity stagnating around a 19-month low, industrial production plunging and inflation being stuck near zero and showing no signs of coming close to the central bank’s target of 2%. In the coming week, the German ZEW Economic Sentiment survey, Eurozone trade balance and EU CPI(August Final) are on the calendar of data releases, but none of these releases are expected to be major market movers for the euro.

The British Pound will be in focus next week with a chain of data being released before the Bank of England’s monetary policy announcement. Most of the data released recently are considered to be broadly indicative of the outlook for the British economy, for a full month after the Brexit vote. The data readings, especially readings from the service sector that have pointed to an expansion, have mostly been above expectations, indicating the limited impact of Brexit on the country’s economy.

Data on inflation, employment and retail sales is due to be reported in the coming week. The U.K. Office for National Statistics will publish data on consumer price inflation for August on Tuesday, monthly jobs report on Wednesday, and data on retail sales on Thursday.

Chinese industrial production and retail sales data by the National Bureau of Statistics is scheduled to be released on Tuesday. Markets expect factory output to have risen by 6.1% last month, after increasing by 6.0% in July, while August’s retail sales are forecast to report a growth rate similar to the July rate of growth at 10.2%.

These numbers could impact the AUD and NZD, as China is their largest trading partner. Dairy prices continue to rise helping the Kiwi to outperform the Aussie and are creating pressure on the AUD/NZD cross, taking it to the lowest level since late April 2015.

In the week ahead, the main focus for the New Zealand dollar will be second-quarter GDP data, which is expected to report the strongest performance since the last quarter of 2013. A positive reading will push the NZD higher across the board, and pave the way for the AUD/NZD pair to retreat further.

The Swiss National Bank’s quarterly policy assessment is due on Thursday with most economists expecting the central bank’s benchmark interest rate to remain unchanged at -0.75%. According to Reuters, the SNB will stick to its commitment towards foreign currency interventions in order to reduce demand for the franc.

In the energy markets the focus remains on Oil. Oil prices tumbled on Friday but closed the week higher, fueled by Russia and Saudi Arabia’s commitment to work together to help rebalance the markets and a surprisingly large drawdown in U.S. crude stocks.

U.S. Energy Information Administration confirmed a huge draw-down in U.S. crude inventories on Thursday. The surprise development had been reported first on Wednesday by the API. Government data showed that U.S. crude stocks dropped by 14.5 million barrels last week to 511.4 million barrels – the biggest weekly drop in stockpiles since January 1999.

Crude prices may receive further support next week, as U.S oil producers could be hit by a delay in the North Dakota oil pipeline construction. Following ongoing protests from environmentalists and Native American tribes, the U.S. Justice Department asked operators of the Dakota Access pipeline to suspend construction along a 40-mile (64 km) stretch in North Dakota on Friday. With the suspension, local oil producers and shippers are facing the possibility of greater delays in setting up a quick route to ship oil to the Gulf of Mexico.

For the week ahead, oil traders will be focusing on U.S. oil supplies data on Tuesday by the American Petroleum Institute, data on stockpiles by the U.S. Energy Information Administration on Wednesday, and U.S. oil rig count by Baker Hughes on Friday for fresh supply-and-demand balance signals.

 

[CSFX.Support]

Daily Report on September 12, 2016 by Option Banque

Daily Report on September 12, 2016

The global equity selloff resumed in Asia after clouding European and U.S markets on Friday. Investor confidence in equities was shattered by slumping oil prices and concerns that the world’s biggest central banks are slowing down the pace of unleashing aggressive easing measures, while the U.S Federal Reserve may start increasing its benchmark rates as soon as next week.

MSCI's broadest index of Asia-Pacific shares outside Japan fell by 1.9 percent, followed by Shanghai with a fall of 1.5 percent, while Australian stocks sank 2 percent, marking the largest daily drop since the selloff in late June following the Brexit vote. Japan’s Nikkei 225 lost 1.5 percent as the yen gained ground, thanks to rising demand for safe-haven assets and surprise gains in Japanese core machinery orders.

According to Japan’s Cabinet Office data reported on Monday, the country’s core machinery orders increased unexpectedly by 4.9% in July (seasonally adjusted), contrasting with estimates calling for a decline of 2.8%. The gauge for mid-term capital spending rose for a second straight month after spiking 8.3% in June, easing some pessimism over negative effects of a stronger yen on business investment.

Oil prices extended losses after falling nearly 4% on Friday as a result of an increase in the number of rigs drilling for crude oil last week and an upcoming output ceiling instead of a freeze deal at current levels. U.S drillers increased the number of oil rigs for a 10th week out of the past 11 weeks to 414, the most since February, said Baker Hughes Inc. Meanwhile, OPEC and other producers are mulling over a voluntary a deal involving each country committing that its production quantities shall not surpass a certain ceiling.

These voluntary oil output caps are to accommodate the demand of Iran, Libya and Nigeria to raise their output. Even though this solution seems not to be as effective as an output freeze agreement, it still promises to prevent a collapse which had happened previously in Doha, due to Iran’s bid to regain its pre-sanctions market share while Nigeria and Libya are looking to increase production after political turmoil restricted output.

The market focus on this quiet Monday is on the speech by the most dovish Fed Governor Lael Brainard. She will make the last scheduled appearance by a U.S. central banker before the traditional pre-meeting quiet period until Fed officials gather in Washington on September 21.



Technicals

AUDUSD

Fig: AUDUSD H4 Technical Chart

AUDUSD has fallen back into the descending trading channel following a decisive slide last week. The pair also attempted to surpass the 38.2% level but exhausted bears could not retain the momentum and had to let go of the milestone and the pair has pulled back. Nonetheless, the Aussie is expected to breach this support as the MA20 has crossed through the MA50 from above. The crossover has signaled further retreat in the AUDUSD. The upside is limited as the prices are contained in the channel.

Trade suggestion

Sell Stop at 0.75250, take profit at 0.74880, stop loss at 0.75550



USDCAD

Fig: USDCAD H4 Technical Chart

USDCAD has broken out of the triangle formation, trading higher for the fourth trading day in a row. Bulls have pushed the market into an overextended state as RSI index is lingering around the 70 threshold. Profit taking has depressed the price from the highs around key level 1.30800 but the two MAs have converged below the price action, supporting further advances.

Trade suggestion

Buy Stop at 1.30800, take profit at 1.31460, stop loss at 1.30187

EURCHF

Fig: EURCHF H4 Technical Chart

EURCHF is once again heading for the 61.8% Fibonacci retracement at 1.09774 and attempting to break above this level. Looking back at the previous failed attempts in the past, we can see that every time the pair tried to make a breakout, the market had already entered the overbought zone. As a result, the bulls failed to maintain their momentum, and had to let the bears step in. This time, the pair is on the rise after a correction with %K line penetrating the %D line from below and pointing up from the current level at around 50. With support from the two MAs placed below the price action, EURCHF is likely to retest the high at 1.09995 created on September 01.

Trade suggestion

Buy Stop at 1.09775, take profit at 1.09995, stop loss at 1.09585


GOLD

Fig: GOLD H4 Technical Chart

Gold slid back below the 1330.00 threshold as a result of a steep drop from more than three-week highs at around 1352.50 which were reached last week. The yellow metal had reached the overbought zone as a result of this sharp spike. As can be seen from the stochastic chart, the %K line has crossed over the %D line and gold is experiencing some corrective moves. Coupled with the fact that 1330.00 is a firm zone of resistance, and that the market remains in bearish territory, the current up moves are not expected to last long.

Trade suggestion

Sell Limit at 1330.00, take profit at 1324.55, stop loss at 1333.10



BRENT

Fig: BRENT H4 Technical Chart

Brent opened the new week with a gap down and continued to head downwards to the 23.6% retracement level at 46.47. The crude price has crossed over the 50-period moving average from above, which has consolidated the downtrend. The RSI index that has only fallen to 38.28 thus far, suggests that there is further room for a retreat.

Trade suggestion

Sell Stop at 47.20, take profit at 46.47, stop loss at 47.83



FTSE

Fig: FSTE H4 Technical Chart

Having declined more than 1% on Friday, the FTSE is on the verge of falling into a downward slopping trading channel. Sellers have reigned through the trading session on Friday, and ramped up the selloff so hastily that it didn’t give the index any chance of a bounce-back or consolidation. The market has fallen into the oversold zone but the wide gap between the %K line and the %D lines indicate little chances of a bounce-back. The index looks set to dip lower today.

Trade suggestion

Sell Stop at 6732.00, take profit at 6660.00, stop loss at 6767.60

 

[CSFX.Support]

AUD/JPY signal by Capital Street FX

AUD/JPY signal by Capital Street FX

From GMT 11:15 12/09/2016

Till GMT 21:00 12/09/2016

Sell at 76.500

Take profit at 76.100

Stop loss at 76.800

 

[CSFX.Support]

U.S Stocks Get A Boost As The Case for September Rate Hike Eases

U.S Stocks Get A Boost As The Case for September Rate Hike Eases

U.S. stocks rose on Monday morning after Atlanta Fed Bank President Dennis Lockhart and his Minneapolis counterpart Neel Kashkari, on separate speeches, stated that there was no “urgency” to take action given the state of the economy.

Adding to the buying pressure was the remarks by Fed Governor Lael Brainard to the Chicago Council on Global Affairs. Ms. Brainard kept her stance as a dovish Fed member by arguing that potential weakness in the labor market and risks of foreign economic downturns cause the U.S economy not to be ready for leaving the its monetary stimulus too quickly.

S&P500 index was up 0.7%, led by 1.21% increase in Telecommunication Services and 1.03% advance in Comsumer Staples.

Trade suggestion

Buy Stop at 2141.00, Take profit at 2150.30 , Stop loss at 2136.00

 

[CSFX.Support]

U.S Treasury Notes Tick Lower As Markets Brace for Higher U.S Rates

U.S Treasury Notes Tick Lower As Markets Brace for Higher U.S Rates

U.S. government bonds fell further on Monday, sending yields to their highest levels since late June amid concerns that major central banks in Europe and Japan are reaching the limits of policy easing measures, and mounting speculation over this month’s rate hike by the U.S Federal Reserve.

The bond market resumed its selloff on Thursday after the policy meeting of the European Central Bank when it disappointed investors by not extending the asset purchase program in which it is buying €80 billion worth of bonds a month, beyond the March 2017 end-date. Lower demand dampened bond prices and drove yields higher in return.

Consequently, Treasuries no longer appear as attractive to foreign investors compared to local currency bonds as they did earlier this year, as the spike in other government bond yields has wiped out the “yield pick-up”. This is the amount foreign investors expect to earn when they sell local government bonds in their respective countries to invest the proceeds into buying 10-year U.S. Treasuries.

Topping up the selling pressure were hawkish comments from the Federal Reserve Bank of Boston President Eric Rosengren, a Fed Member widely considered to be a dove. In a speech delivered on Friday, Rosengren discussed the risks of waiting too long to raise interest rates as the labor market has been near or at full employment, while inflation is slowly returning towards the central bank’s 2% target.

Another Fed governor who has maintained a dovish stance on monetary policy will be speaking later on Monday. Lael Brainard has generally been advocating maintaining low rates in the current economic climate, and will round up the appearances by U.S. central bankers until they gather for the FOMC meeting on September 21 in Washington.

Therefore, if a different argument, or hints of a change in opinion are delivered tonight, the possibility of a rate hike this month will shoot up, and in turn, pave the way for a further rise in bond yields. The Treasury Department is scheduled to auction the benchmark 10-year notes before Ms. Brainard’s speech. The uptake from the auction combined with the effects of the speech could magnify the volatility in the 10-year notes.

Fig: US 10-year treasuries

The 10 year T-notes have been on a slide since early June. The price once again fell below the 38.2% retracement level after a spike last week. With the downward pressure which being cast by the two moving averages placed above the price action, U.S 10-year treasury prices are anticipated to continue the downtrend and may retest the 50% fibonacci retracement level.

Trade suggestion

Sell Stop at 130.20, Take profit 129.90, Stop loss at 130.50

 

[CSFX.Support]

Daily Technical Analysis by Capital Street FX

Daily Report on September 13, 2016



Asian shares edged up on Tuesday, taking their cue from European and U.S equities last night which shot up on the dovish comments from Federal Reserve Governor Lael Brainard. In a speech to the Chicago Council on Global Affairs, Brainard – one of six permanent voters on the Fed committee – stated that a labor market which is not-yet-at-full-employment and economic weakness abroad may demand more prudence in the move toward tighter Fed policy.

Brainard’s comments weakened the case for a September rate hike, triggering the recovery in stocks and weakening the U.S dollar.

Large Japanese manufacturers turned optimistic over the country’s business conditions in the third quarter, the joint survey by the Ministry of Finance and the Economic and Social Research Institute showed on Tuesday. The business survey index (BSI) which measures business sentiment among big manufacturers’ during the July-September period, came out at 2.9, beating expectations for a reading of -6.5.

The Australian dollar dipped slightly in early trade following comments from Reserve Bank of Australia assistant governor Christopher Kent on the need for a weaker currency. The central bank official said that the Aussie had not depreciated as much as expected in response to weaker commodity prices and cuts in interest rates that have brought the cash rate to a record low of 1.5%.

Australia’s biggest trading partner, China, is reporting some signs of recovery after some disappointments in July. Data from the National Bureau of Statistics indicated that factory output, investment and retail sales all exceeded forecasts. Industrial production rose by 6.3 percent from a year earlier in August, retail sales climbed 10.6 percent last month, compared to the same period last year while fixed-asset investment increased 8.1 percent year to date.



Technicals

EURJPY



Fig: EURJPY H4 Technical Chart

EURJPY generally has been on a decline from as high as 115.938. The short-term MA has just crossed over the long-term MA from above, consolidating the downtrend. Sellers are still overwhelming the market, suggesting more down moves which may push the pair to as low as 113.930.

Trade suggestion

Sell Stop at 114.400, Take profit at 113.930, Stop loss at 114.430



NZDUSD



Fig: NZDUSD H4 Technical Chart

After failed attempts to break above the 50% retracement at 0.74715, NZDUSD not only fell back into the ascending trading channel but also hit a more-than-one-week low at around 0.72898. The pair pulled back from the lower boundary of the channel and is currently facing firm resistance at 0.73420. Weakening bulls have failed to push the price past the MA20. The market remains in bearish territory. With the RSI pointing towards the oversold zone, further declines are expected.

Trade suggestion

Sell Stop at 0.73370, Take profit at 0.73110, Stop loss at 0.73650



GBPCAD



Fig: GBPCAD H4 Technical Chart

GBPCAD has built upon the bullish formation, after some corrective moves. Buyers have reigned in the market since mid-August and taken the pair considerably higher. The two MAs placed below the price action are fueling the bullish momentum but the resistance at 1.74500 should be watched closely, as the market has reversed from this zone on multiple occasions previously

Trade suggestion

Buy Stop 1.74100, Take profit at 1.74500, Stop loss at 1.73660



SILVER



Fig: SILVER H4 Technical Chart

Silver is struggling around the major resistance level at 19.2000, and the upside currently seems limited as the two MAs placed above the price action, and are casting downward pressure on prices. The last three candles with long upper shadows and almost no lower shadows show strong but careful bulls moving cautiously when the price nears the key resistance level. The %K line has entered the overbought zone, and may cross through the %D line from above, signaling a possible pullback.

Trade suggestion

Sell Stop at 19.100, Take profit at 18.850, Stop loss at 19.400



WTI



Fig: WTI H4 Technical Chart

U.S crude prices continued to trade within the triangle formation, and have just pulled back from the upper boundary connecting lower lows since August 19. The 23.6% retracement level is within sight of the oil price. However, recently this level has been broken through quite easily. Therefore, if the bear can sustain its momentum, WTI may trader lower towards the lower boundary of the trading range.

Trade suggestion

Sell Stop at 45.80, Take profit at 45.00, Stop loss at 46.40



EURO50



Fig: EuroStoxx50 H4 Technical Chart

Euro Stoxx 50 index rebounded from below the 38.2% level and broke back into the ascending trading range that has enveloped the recent price action. RSI has rallied from the oversold territory to near the 50 line. The resistance at 3050.00 is currently within sight of the price action. We should wait for the index to surpass this level before an uptrend can be confidently confirmed.

Trade suggestion

Buy Stop at 3050.00, Take profit at 3074.30, Stop loss at 3040.00

 

[CSFX.Support]

GBP/USD signal by Capital Street FX

GBP/USD signal by Capital Street FX

From GMT 12:35 13/09/2016
Till GMT 21:00 13/09/2016

Buy at 1.32000
Take profit at 1.32500
Stop loss at 1.31000

 

[CSFX.Support]

USDJPY Market Outlook by Capital Street FX

Japanese Data Surprises Markets – Traders Undecided Ahead Of BOJ/FED

The Japanese Yen was almost unchanged against the U.S dollar in the early European session on Tuesday after having risen to the highest since last Thursday at 101.409. The Yen was powered by upbeat data released earlier today. Meanwhile the greenback nursed losses following the decline on Monday as the case for a September rate increase became “less compelling”.

Adding to Monday’s core machinery orders data that unexpectedly rose by 4.9%, (contrasting considerably with estimates calling for a decline of 2.8%), Japan’s economic data extended the upbeat sentiment today, offering some encouragement to policymakers working towards re-energizing business investment, domestic demand and price growth.

According to a joint survey by the Ministry of Finance and the Economic and Social Research Institute, large Japanese manufacturers turned optimistic over the country’s business conditions in the third quarter. The business survey index (BSI) which measures business sentiment among big manufacturers’ for the July-September period, came out at 2.9, beating expectations for a reading of -6.5.

In other notable data readings, the Japanese economy grew at a pace greater than initially reported. Data released on Thursday indicated that the reading for the annualized growth rate was revised upwards to 0.7% in the second quarter (on a year on year basis). The preliminary reading had reported a 0.2% rate of expansion. On a quarter-on-quarter basis, the world’s third biggest economy expanded by 0.2%, largely due to upbeat capital expenditure and inventories, which outpaced the decline in domestic and overseas demand caused by a strong yen.

The Bank of Japan is scheduled to hold its policy meeting on September 20-21, where it will assess the effectiveness of stimulus measures deployed recently within the economy. On the same day that BoJ policymakers announce the results of their comprehensive assessment, the Federal Open Market Committee will gather in Washington to discuss the next steps within their monetary policy, and any possibility of a rate hike at the meeting.

Fed officials are expected to go into the meeting divided. Besides some governors claiming that the U.S labor market has come close to full employment and urging a rate hike sooner, rather than later, Fed voter Lael Brainard has opined that the Fed should be patient and wait for more evidence of stronger consumer spending and rising inflation. In a speech to the Chicago Council on Global Affairs, Brainard maintained her dovish stance on rate policy, and referring to potential weakness at home and risks of an economic downturn abroad, as potential risk factors.

Fig: USDJPY D1 technical chart

The Japanese Yen has generally been on a rise against the USD, but is trading sideways around the key level at 102.000. While the RSI is swinging back and forth around the dividing line between bullish and bearish territory, the ADX index has turned lower to 24.95 from the high at 42.57, suggesting no clear opinion being formed in the market. With no data releases scheduled till the end of the day, neutral sentiment is expected to reign in the pair.

Trade suggestion

Sell Limit at 102.500, Take profit at 102.000, Stop loss at 103.050

 

[CSFX.Support]

Apple Signal by Capital Street FX

Note 7’s Troubles Spell Boom For Iphone7 – Apple Defying Global Stock Sell Off

Against the backdrop of the global selloff in stocks, Apple was the only component of the Dow Jones gaining ground on Tuesday, and it was just one among the very few constituents of the technology-heavy Nasdaq-100 Index, that were trading in the green.

Apple shares surged nearly 3% after T-Mobile US. Inc. reported that advance orders for the iPhone 7 and iPhone 7 Plus during the Friday-Monday period last week were nearly four times that of the previous record over similar time frames.

Trade suggestion

Buy Stop at 108.20, take profit at 108.80, Stop loss at 107.50

 

[CSFX.Support]

Daily Technical Analysis by Capital Street FX

Daily Report on September 14, 2016



Asian shares dropped on Wednesday as investors were questioning whether the stimulus programs being run by major central banks’ have reached their limits. Meanwhile, the U.S dollar retreated against most of its peers after jumping 0.6% on Tuesday amid rising Treasury yields and a selloff in stock markets worldwide.

Wall Street fell to its lowest since early July, led by losses in the energy sector as oil prices tumbled following reports that the global supply glut will extend into next year. The IEA sparked an oil rout by cutting oil demand forecasts by 100,000 barrels a day for this year and 200,000 barrels in 2017, given the economic fatigue in China, India, Europe and the U.S.

Having plunged as much as 3% in the previous session, crude prices re-gained lost ground in the Asian trading session today, as data from the American Petroleum Institute (API) reported a buildup of 1.4 million barrels in crude oil stocks last week, lower than a 3.8 million-barrel increase expected by economists. Official oil inventory data will be issued by the U.S. government later today.

In a video message aired at a seminar in Tokyo organized by Bank of America Merrill Lynch, Japanese Prime Minister Shinzo Abe stated that downside risks to the global economic outlook are rising, but expressed optimism that recent monetary policy changes by the Bank of Japan are gradually feeding through to the real economy.

According to the Nikkei newspaper, the BOJ is considering further cuts to its interest rates, and is likely to make its negative rate policy the centerpiece of future monetary easing in order to reach the 2% inflation target, as the asset buying programs have neared their limits.



Technicals

AUDUSD



Fig: AUDUSD H4 Technical Chart

The Aussie has witnessed its steepest downfall since June 24 which helped the pair AUDUSD to break through two important supports at the 23.6% and 38.2% levels easily. The price attempted to breach the 50.0% retracement as well but unfortunately, profit taking caused the pair to pull back. Suppressed by the two MAs placed above the price action, the current up moves are expected to lose their strength once the price hits the resistance at 0.74900.

Trade suggestion

Sell Limit at 0.74900, Take profit at 0.74530, Stop loss at0.75255



USDCAD



Fig: USDCAD H4 Technical Chart

USDCAD has been experiencing some corrective moves after soaring strongly to the solid resistance at 1.31900. The pair even surpassed the high at 1.31470 reached on September 01. As can be seen from the RSI chart, the market has cooled down after a sharp rally that pushed the price into the overbought zone. Still, ADX is pointing upwards, suggesting underlying bullish momentum.

Trade suggestion

Buy Limit at 1.31470, Take profit at 1.31470, Stop loss at 1.31130



EURGBP



Fig: EURGBP H4 Technical Chart

EURGBP is moving sideways above the support level at 0.84950 after the pair successfully broke above this level yesterday. This consolidation period is the result of a market that has entered the overbought state. Further advances are anticipated as the MA20 has already penetrated the MA50 from below. Both MA's are placed below the price action.

Trade suggestion

Buy Limit at 0.84950, Take profit at 0.95620, Stop loss at 0.84440



GOLD



Fig: GOLD H4 Technical Chart

Gold is off a one and a half week low at 1313.45 as bulls stepped in and supported the a bounce-back from the support at 1315.00. The short-term MA has penetrated the long-term MA from above, and both MA's are currently placed above the price action, casting downward pressure on gold prices. Looking back at previous consolidations, the resistance at 1325.00 may be a point from which the precious metal may again reverse lower.

Trade suggestion

Sell Limit at 1325.00, Take profit at 1315.00, Stop loss at 1330.00



Natural Gas



Fig: Natural gas H4 Technical Chart

Natural gas continued to extend the bullish momentum, extending the up-move from the low at the 23.6% retracement (at 2.668) recorded on September 07. The price has broken above the ascending trendline connecting higher lows but the solid resistance at 2.940 is within sight and a pullback at this level may be expected as market has been overextended for a while.

Trade suggestion

Sell Limit at 2.940, Take profit at 2.900, Stop loss at 2.965.



DAX30



Fig: DAX 30 H4 Technical Chart

The DAX 30 index opened the European session with a gap up today. Even though the index is under the spell of the two moving averages placed above the price action, the %K line has pulled back and is likely to cross over the %D line, suggesting a reversal in market direction. Traders may need to wait for a clear confirmation of an uptrend before placing a trade.

Trade suggestion

Sell Stop at 10400.00, Take profit at 10350.00, Stop loss at 10472.50

 

[CSFX.Support]

Copper Market Outlook by Capital Street FX

Copper Rallies on More Signs of Rising Demand And Falling Supply

Copper rose considerably on Wednesday, surging to over three-week highs at $2.1278/lb. The rally was driven by positive economic data in the United States and China recently, and the covering of short positions in China ahead of the upcoming Mid-Autumn Festival in China.

Data from the Census Bureau on Tuesday indicated that U.S household income registered a record growth rate in 2015 after years of stagnation. The median household income adjusted for inflation increased by 5.2%, or $2,798, to $56,516, from a year earlier, indicating the effects of sustained job growth in lifting the living standards of ordinary citizens who had been largely left behind by the recovery in the economy.

According to the report, the unemployment rate has declined from a peak of 10 percent in October 2009 to 4.9 percent last month, while income advanced by 4.4% to $57,200 in native-born households. The number of people living in poverty fell by 3.5 million to 43.1 million last year, pushing the poverty rate down to 13.5% in 2015 from 14.8% in 2014.

In China, a raft of economic data published this week contributed to signs of improvement in the world’s top copper importing country. Factory output, investment and retail sales all grew faster than expected in August, bolstering speculation of strengthening demand for the red metal.

On the Shanghai Futures Exchange, total positions in all copper contracts fell by 19,324 to 470,000 with trading volumes at 300,000 lots. Positions were closed by shorts while longs took no action due to the upcoming holiday between September 15-17. The Chinese market will be closed tomorrow and Friday for the mid-autumn festival.

Copper demand at the Multi Commodity Exchange (India) advanced by 0.19% for delivery in November and by 0.23% for delivery in February 2017 contracts. India ranks number 9 in the list of top 10 copper importers in 2015. The country signed an agreement with Chile last week to expand the India- Chile Preferential Trade Agreement (PTA), in which India has offered a concession to copper imported from Chile with a margin of preference of 50%. As copper is an important input for many sectors of India’s economy, the country expected the demand for this metal will soon grow beyond current domestic capabilities.

On the supply side, more mining firms in the Phillipine face potential mine suspensions under an environmental standard audit backed by President Rodrigo Duterte. The audit’s outcome will be issued on Thursday.

Fig: Copper D1 technical Chart

Copper bounced off the support at 2.09000 after more than 2 weeks of trading around this level. The metal has broken out of the descending trading channel and also moved past the MA20 at 2.1005, having broken through it from below. The RSI index finally surpassed the 50-line after spending a long period of time under this threshold, confirming the current uptrend.

Trade suggestion

Buy Stop at 2.1280, Take profit at 2.1400, Stop loss at 2.1100

 

[CSFX.Support]

Crude Trade Idea by Capital Street FX

Unexpected Buildup in U.S Distillate Inventories Offsets Crude Draw Down

U.S crude prices failed to register a rebound from one-week lows at below $45 per barrel even after the U.S. Energy Information Administration reported that domestic crude oil supplies fell by 600,000 barrels last week. The number came in well below expectations of a 4 million-barrel increase in the week through September 9, 2016.

The surprise drawdown in U.S crude stockpiles was outweighed by the large buildup in inventories of petroleum products, which rose by 4.6 million barrels compared to one week ago. Analysts had only expected an increase of 1.5 million barrels.

Trade suggestion

Sell Stop at 43.80, take profit at 43.30, stop loss at 44.50

 

[CSFX.Support]

AAUD/NZD signal by Capital Street FX

AUD/NZD signal by Capital Street FX

From GMT 11:50 13/09/2016
Till GMT 21:00 14/09/2016

Buy at 1.02600
Take profit at 1.03000
Stop loss at 1.02400

 

[CSFX.Support]

Daily Technical Analysis by Capital Street FX

Daily Report on September 15, 2016



Global equities extended their rout in Asian trading hours on Thursday as a tumble in crude oil sapped investor appetite for risky assets. The MSCI Asia Pacific Index declined 0.5%, prolonging the retreat to a sixth consecutive day, and marking the longest losing streak in four months. Japan’s Topix index also posted losses, sliding for a seventh day.



Data by the Australian Bureau of Statistics on Thursday reported a rise in the number of people leaving the labor force, which helped reduce the unemployment rate to the lowest level since September 2013. Australia’s jobless rate fell to the lowest in almost three years in August, coming in at 5.6% from 5.7% in July. Fewer people sought work, dampening the participation rate lower to 64.7% from 64.9%. Specifically, in contrast to economists’ forecast of a 15,000 gain in the number of people employed, employment actually dropped significantly, with the number of people employed falling by 3,900 from July.



Elsewhere, Statistics New Zealand announced that the country’s second-quarter gross domestic product increased by only 0.9 percent from the previous three months, missing the 1.1 percent expansion forecast by economists. The New Zealand Dollar was down 0.2 percent after the report.



Today, investor attention will be on the two central bank meetings at the Bank of England and the Swiss National Bank. The BOE’s assessment of how the economy has performed since its last gathering on Aug. 4 will be in the spotlight. The central bank is forecast to maintain an unchanged policy, after easing rates last month, after data released recently , indicated that projections for a sharp slowdown in Britain's economy after June's Brexit vote, could be overestimating the potential damage.



Technicals

CADJPY



Fig: CADJPY H4 Technical Chart

CADJPY is falling further, having already lost more than 300 pips (3.6%) from the highs around 80.300. The downtrend does show signs of weakening with shorter bodies in the recent candles. However, the two MAs placed above the price action, continue to fuel the bearish momentum in the pair. The RSI is pointing downwards and heading down from the neutral threshold. CADJPY is expected to slide further.

Trade suggestion

Sell Stop at 77.400, take profit at 77.000, stop loss at 77.620



NZDUSD



Fig: NZDUSD H4 Technical Chart

The slide in NZDUSD resumed after a period of correction yesterday. NZDUSD has fallen out of the upward slopping range and is struggling with the support at 0.72640. The lower boundary of the trading channel which has just been breached has now turned into a resistance which suppressed the pair’s attempt to break back into the channel. The pair may fall deeper to the zone of support at 0.72070 should the current support levels be broken as the bear is overshadowing the market and casting downward pressure on the pair.

Trade suggestion

Sell Stop at 0.72600, take profit at 0.72070, stop loss at 0.73000



EURCAD



Fig: EURCAD D1 Technical Chart

EURCAD has been registering a strong rally which helped the pair break out of the shrinking trading range formed during the April-August period. After a sharp increase, bulls seem to be getting weaker. As can be seen in the stochastic chart, the +DI line is heading downwards. Still, the ADX index is soaring higher, combined with a rising RSI, suggesting further advances.

Trade suggestion

Buy Stop at 1.48600, take profit at 1.49260, stop loss at 1.47785



SILVER



Fig: SILVER H4 Technical Chart

Silver has been restrained below the MA20 for a while, and is forming lower highs after failed attempts to break through this flexible resistance. The %K line and %D line on the stochastic chart are pointing down towards the oversold area, indicating a market in favor of the bears. Nonetheless, as the support at 18.765 is within sight, the current decline may be limited.

Trade suggestion

Sell Stop at 18.875, take profit at 18.765, stop loss at 19.000



BRENT



Fig: BRENT H4 Technical Chart

Brent crude pulled back to above 46.00 from nearly two-week lows at 45.69. The rebound came in as a result of an oversold market. Recent up candles with short bodies suggest that the slump is expected to resume soon as sellers are overwhelming. The two MA's are placed above the price action and the price has not been able to cross over the MA's despite some recent attempts to do so. Key support at 45.30 is anticipated to be retested.

Trade suggestion

Buy Limit at 46.10, take profit at 45.30, stop loss at 46.50



FTSE



Fig: FSTE H4 Technical Chart

The FTSE has hit the low at 6660.00 three times in the last three days but failed to break this major technical level on every attempt. Lower highs are being formed on the stochastic chart, indicating an underlying bear that is gaining strength. Any uptrend at this moment seems to be limited as the downward pressure is coming from both MAs placed above the price action as well as the upper boundary of the downward sloping trading range, that the prices are currently trading within.

Trade suggestion

Sell Stop at 6660.00, take profit at 6610.70, stop loss at 6720.00

 

[CSFX.Support]

Uncertain Acquisition Deal Clouds Oracle’s Future Outlook– Short Positions Suggested

Oracle Corporation is scheduled to release its first-quarter financial results for fiscal year 2017 after the market closes on Thursday. The company is expected to report an EPS of 58 cents per share on adjusted earnings and revenues of $ 8.7 billion, compared to $8.5 billion last year.

Oracle has been on a path of progress towards transitioning to cloud based products and services. The company is focusing on a deal to acquire San Mateo- based software company NetSuite at the price of $9.3 billion. The acquisition is needed for Oracle to bolster sales of cloud-based tools to compensate for declining traditional hardware and software license revenues.

Oracle has reported five straight quarters of declining sales and is being left behind in the competition with cloud software vendors such as Salesforce.com and Workday.

Trade suggestion

Sell Stop at 40.20, Take profit at 40.00, Stop loss at 40.50

 

[CSFX.Support]

GBPUSD Ignores Subdued U.S data, Weighed by Potential BOE Rate Cut – Longs Still Prof

GBPUSD Ignores Subdued U.S data, Weighed by Potential BOE Rate Cut – Longs Still Profitable

British Pound snapped yesterday’s gains versus the U.S dollar after the Bank of England telegraphed a potential rate cut later this year. Meanwhile, faltering US retail sales and producer prices in August didn’t provide much support on the currency pair.

After cutting its benchmark interest rate and unleashing a quantitative easing program worth £435 billion ($576 billion) last month to cushion an economic downturn following the Brexit vote, the BOE left unchanged its key interest rate at a record low 0.25% and made no further changes to the size of its QE program on Thursday.

Given the recent data that reported the U.K economy performing stronger than expected, BOE officials were also unanimous on continuing with the plan of purchasing gilts and corporate bonds, and offering ultra-cheap loans to banks. However, nine members of the Monetary Policy Committee noted that near-term data could not be used to draw inferences for longer-term forecasts. Thus, there is a chance for a further cut in interest rates in 2016, should the economy weaken.

Earlier on Thursday, the Office for National Statistics reported that retail sales fell by 0.2% in August compared to July, translating into a 6.2% advance compared to the same period last year. Today’s data reported a smaller decline than the 0.4% fall expected, after July’s sales figures had been revised upwards, marking the strongest annualized rate of growth for the month of July since 2001.

In the U.S, a chain of economic data came out earlier today. But most of them failed to generate positive signals. U.S. wholesale prices were reported to be flat in August, mostly because of sharp declines in the cost of food and gasoline. This consequently dampened retail prices for the same goods and dragged the overall retail price index down by 0.3%.

Sales at U.S. retailers fell for the first time in five months. Not only were department stores suffering losses due to the robust of online sales, internet sellers were also hit for the first time since the start of 2015. Only grocers and clothing outlets recorded an increase last month. Supported by back-to-school demand, sales at apparel stores climbed the most by 0.7%.

Core retail sales, which exclude automobiles, ticked lower by 0.1% in August after falling by 0.4% one month earlier.

In a separate report, the Federal Reserve announced that output at American manufacturers fell 0.4% in August. The consensus forecast had called for a decline of 0.2%. The results are consistent with the ISM’s factory survey for August, which had signaled a contraction, and also worsened the outlook for producers, after a private survey of purchasing managers last week showed that manufacturing contracted in August.

The softer than expected data from the US, however, failed to lend support to the GBP and GBPUSD was trading down 0.2% in late morning US trade.

Fig: GBPUSD H4 Technical chart

GBPUSD has been on a decline for more than a week, with the price action moving from the upper boundary of the upward trading channel straight to the lower boundary of the trading channel and also breaking through the short and long term MA’s in the process. The pair eventually fell out the range and has failed to crawl back. However, the down move is now facing a strong zone of support marked by the downward sloping trendline that connects previously registered lows of significance. Further declines are expected but a bounceback may occur when the market attempts a test of the red trendline.

Trade suggestion

Buy Limit at 1.31650, take profit at 1.32100, stop loss at 1.31300

 

[CSFX.Support]

Natural Gas/USD signal by Capital Street FX

Natural Gas/USD signal by Capital Street FX

From GMT 15:00 14/09/2016
Till GMT 21:00 15/09/2016

Sell at 2.850
Take profit at 2.810
Stop loss at 2.890