Daily Report on November 17, 2016
Asian shares firmed while European stocks declined with Treasury yields on Thursday. The U.S. dollar also weakened as investors were cautiously waiting for report on American inflation data and the testimony of Federal Reserve Chairwoman Janet Yellen later on the day.
The dollar index, which measures the greenback's strength against a basket of major currencies, retreated by 0.15% to 100.15 after reaching its highest since April 2003 at 100.570 overnight. Fed President Yellen will be addressing Congress for the first time since Republican Donald Trump won the presidential election on November 08th.
His plans for fiscal stimulus including cutting rates and ramping up government spending are expected to spur inflation in the U.S. and thus quicken the pace of Fed interest-rate hikes. Speculation over a December rate increase has been rising, which triggered a global bonds rout and powered the dollar since the start of last week.
As a result of global bonds selloffs that caused Japanese government bonds yields to surge higher, the Bank of Japan on Thursday fired a warning shot against excessive yield moves by offering to buy an unlimited amount of JGB at fixed rates for the first time since the introduction of a new policy framework. The move reiterated Japanese central bank’s pledge to keep the benchmark yield pinned around zero percent.
Elsewhere, Australia's unemployment rate was reported to have been unchanged at 5.6% in October. As stated by the Australian Bureau of Statistics, the number of people employed rose by 9,800, driven by an increase in fulltime jobs. However, economists had expected overall employment to soar by 18,000 positions.
Fig: EURGBP H4 Technical Chart
EURGBP has been trading in a thin range in the last two days as the pair failed to breach the support at 0.85800. Nonetheless, the Euro is likely to lose ground versus its British counterpart as the short-term MA20 is containing the price. In the event of continual down moves, the pair may find its support at 0.84800.
Buy Digital Put Option from 0.85800 to 0.84800 valid until 20:00 GMT November 17, 2016
Fig: AUDCAD H4 Technical Chart
AUDCAD has extended its downtrend for the third consecutive trading day. Sellers have been overwhelmingly dominant in the market that forced the pair to remain in the oversold zone. Although ADX is surging, the +DI line has been pointing downwards, suggesting an underlying correction. The support at 38.2% retracement is expected to be the point the prompts the price to reverse higher.
Buy Digital Call Option from 0.99860 to 1.00400 valid until 20:00 GMT November 17, 2016
Fig: USDCHF H4 Technical Chart
USDCHF retreated from over 8-month highs near 1.00600. The pair is approaching the milestone at 1.00000 and the Fibonacci retracement at 61.8% level. As can be seen from the Stochastic chart, USDCHF has almost reached the oversold zone. Hence, a pullback is expected.
Buy Digital Call Option from 1.00000 to 1.00600 valid until 20:00 GMT November 17, 2016
Fig: Coffee H4 Technical Chart
After a correction at the start of this week, coffee price resumed its slide but is trading sideways to lower above the support at 160.60. As can be observed from the ADX chart, there are no clear trend in the market yet, as the ADX has fallen below 20. However, sellers are overwhelming and may send the price lower after this consolidation.
Buy Digital Put Option from 160.60 to 157.50 valid until 20:00 GMT November 17, 2016
Fig: BRENT H4 Technical Chart
Brent crude resumed its uptrend after retreating from two-week highs at 47.54 logged yesterday. The level at 47.54 is also near the 23.6% Fibonacci retracement. With the short-term MA20 that has penetrated the long-term MA50 from below, the commodity price is expected to extend its uptrend, at least to re-attempt the 23.6% resistance.
Buy Digital Call Option from 46.75 to 47.50 valid until 20:00 GMT November 17, 2016
Fig: DAX 30 H4 Technical Chart
Germany DAX 30 index has been on a decline which sent its price action to below the short-term MA20 for the first time since November 08. The crossover suggests a reversal into a downtrend, which has been confirmed by the RSI index that has just moved past the 50 line. The support at 50.0% retracement is within the sight.
Buy Digital Put Option from 10620.00 to 10580.00 valid until 20:00 GMT November 17, 2016