Daily Report on November 18, 2016
Most Asian stock markets turned higher on Friday, tracing gains of the U.S. shares overnight. At the close in NYSE, and the NASDAQ Composite index soared 0.62% and the Dow Jones Industrial Average edged 0.1% higher. The benchmark S&P 500 index added 0.39%, heading closer to its record high on Thursday. While consumer discretionary sectors got a boost from positively economic data and earnings, bank stocks were fueled by prospect of higher interest rates.
The U.S. dollar surged to a 13-1/2-year high after U.S. Federal Reserve Chair Janet Yellen, who testified on the economic outlook before the congressional Joint Economic Committee on Thursday, bolstered the case for raising interest rates next month. Yellen indicated little had changed following the victory of Donald Trump U.S. presidential election earlier this month, and added that she would serve out her full term, which ends in 2018.
Oil prices ticked lower on Friday, but looking set to finish the week higher. The strength in the greenback is contemporarily overshadowing expectations of an OPEC agreement to curb crude production. However, focus will be on the informal meeting of the cartel in Doha this weekend where at least 11 OPEC members will gather in an attempt to finalize the deal reached this September to cut or freeze oil output.
Elsewhere, Mexico's central bank on has raised its key rate 50 basis points (bps) to 5.25 percent, the highest level since May 2009. The Banco de Mexico warned that the outcome of the U.S. election had cast doubt on the relationship between two countries. In his presidential campaign, Trump did threaten to unwind a free trade deal with Mexico and block the money sent home by migrants to pay for a border wall. The victory of Trump on November 8th had sent the Peso to its record low level, which marked the biggest two-day loss of the currency since the historic devaluation in 1995.
Fig: GBPCHF H4 Technical Chart
GBPCHF has broken out of the trading range from 1.24000 to 1.25140. The pair has been powered by the short-term MA20 and is likely to test the 23.6% level at 1.26160. While RSI chart indicates an overwhelmingly bullish force, ADX also shows a wide gap between +DI and –DI lines.
Buy Digital Call Option from 1.25400 to 1.26100 valid until 20:00 GMT November 18, 2016
Fig: AUDNZD H4 Technical Chart
AUDNZD extended its slide to the third consecutive day. The pair is approaching the 23.6% level at 1.04790. The pair has been under downward pressure from two MAs which may help the price to breach the 23.6% handle as this is not a firm handle. The price may find its support at around 1.04500.
Buy Digital Put Option from 1.05000 to 1.04500 valid until 20:00 GMT November 18, 2016
Fig: BRENT H4 Technical Chart
Brent crude retreated from the 23.6% Fibonacci retracement and has broken below the support at 46.00. The commodity price action has also crossed over both short-term and long-term MAs, suggesting a reversal into a downtrend. RSI that moved past the average line supports the case for Brent crude to fall deeper.
Buy Digital Put Option from 45.80 to 45.00 valid until 20:00 GMT November 18, 2016
Fig: NASDAQ 100 Index H4 Technical Chart
The U.S. benchmark NASDAQ 100 is on track to complete the double bottom pattern after the index rebounded from the low at 4675.80 (which is also the 23.6% retracement). The price has surpassed the neck level at 4778.36 to reattempt the resistance at 4880.00. The RSI index is pointing upwards, supporting further advances.
Buy Digital Call Option from 4835.00 to 4880.00 valid until 20:00 GMT November 18, 2016