Daily Report on August 31, 2016
Japanese stocks traded higher on Wednesday after sluggish domestic data and prospects of further easing by the Bank of Japan contributed to dragging down the Yen. Japan’s Nikkei 225 index added nearly 1.0% to jump to a two-week high at 16903.00, supported by comments from BOJ board member Yukitoshi Funo that the central bank would make full use of its existing policy tools to encourage spending and dislodge the “deflation mindset”.
According to data released earlier on Wednesday, Japanese industrial production was unchanged in July, defying forecasts calling for a 0.7% gain from June. Compared to July 2015, Japan’s industrial output declined 3.8%, underscoring the fragility in factory activity.
Meanwhile, upbeat U.S. data lifted the dollar overnight. Published by the Conference Board, the U.S Consumer Confidence Index for August stood at 101.1 - the highest level since September 2015. In an interview with Bloomberg last night, Fed Vice Chairman Stanley Fisher said that the country’s job market which is nearing full strength can withstand a tightening of rates while the pace of rate hikes will be based on upcoming economic data.
Data from the American Petroleum Institute showed that U.S. crude stocks rose by 942,000 barrels to 525.2 million barrels in the week to Aug. 26, topping analysts' expectations for an increase of 921,000 barrels. Official U.S. oil inventories data published by the EIA, is due later today, and is expected to show an increase of 1.1 million barrels last week.
Technical
AUDNZD
Fig: AUDNZD H4 Technical Chart
AUDNZD is on the last stages of a double-top pattern. The price surpassed the neck level at 1.04550 last week and fell deeper towards the major support at 1.04000, before pulling back to hit the 1.04550 handle. As we can see from the chart, this level has played an important part as a support zone previously, and is now returning as an important resistance at which the AUDNZD failed and was forced to reverse lower. The divergence between the +DI line and –DI line and a surging ADX index has helped the pair break through the 1.04000 level easily, and is expected to dampen the price lower.
Trade suggestion
Buy Digital Put Option from 1.03750 to 1.03350 valid until 20:00 GMT August 31, 2016
USDCHF
Fig: USDCHF H4 Technical Chart
USDCHF has pulled back from the solid resistance at 0.98420 after soaring more than 300 pips consistently, from the low at 0.95370. As a result of an overblown market where the bulls have been exhausted after a long period of time supporting prices higher, the U.S dollar is making some corrective moves. With the two MAs placed below the price action, the pair is expected to extend the rally.
Trade suggestion
Buy Digital Call Option from 0.98520 to 0.98775 valid until 20:00 GMT August 31, 2016
USDCAD
Fig: USDCAD H4 Technical Chart
USDCAD has been on the rise after breaking above the 23.6% Fibonacci retracement level at 1.28959. The market has once again entered overbought territory and reversed lower. Still, the directional strength index is pointing upwards, suggesting that the bull is prevailing in the market.
Trade suggestion
Buy Digital Call Option from 1.31000 to 1.31400 valid until 20:00 GMT August 31, 2016
SILVER
Fig: SILVER H4 Technical Chart
Silver has moved past the MA20 at 18.680 from below, but has kept floating under the MA50. The moving average has deterred every attempt by the market to break above this zone of resistance for the last two weeks. The silver market has been held inside bearish territory for some time now, which has helped push prices towards the 38.2% retracement level at 18.288.
Trade suggestion
Buy Digital Put Option from 18.660 to 18.520 valid until 20:00 GMT August 31, 2016
Natural Gas
Fig: Natural Gas H4 Technical Chart
Natural gas has entered into a phase of consolidation recently, after dropping back to the 2.811 support level. The price has penetrated the MA20 from above but still has support from the 50-period moving average, which is in the same zone as the current prices. The RSI and The Stochastics are both pointing towards a bearish market. As a result, natural gas is forecast to plummet below the 2.811 threshold.
Trade suggestion
Buy Digital Put Option from 2.810 to 2.775 valid until 20:00 GMT August 31, 2016
Nasdaq100
Fig: NASDAQ100 H4 Technical Chart
The Nasdaq100 index is on the verge of falling through the recent price range between the resistance at 4835.00 and the support at 4766.00. A convergence between the two MAs has occurred above the price action, after prices broke through both MA's from above yesterday. The RSI and Stochastics are both below the average level. Further falls may be on the way.
Trade suggestion
Buy Digital Put Option from 4766.00 to 4748.25 valid until 20:00 GMT August 31, 2016
Japanese stocks traded higher on Wednesday after sluggish domestic data and prospects of further easing by the Bank of Japan contributed to dragging down the Yen. Japan’s Nikkei 225 index added nearly 1.0% to jump to a two-week high at 16903.00, supported by comments from BOJ board member Yukitoshi Funo that the central bank would make full use of its existing policy tools to encourage spending and dislodge the “deflation mindset”.
According to data released earlier on Wednesday, Japanese industrial production was unchanged in July, defying forecasts calling for a 0.7% gain from June. Compared to July 2015, Japan’s industrial output declined 3.8%, underscoring the fragility in factory activity.
Meanwhile, upbeat U.S. data lifted the dollar overnight. Published by the Conference Board, the U.S Consumer Confidence Index for August stood at 101.1 - the highest level since September 2015. In an interview with Bloomberg last night, Fed Vice Chairman Stanley Fisher said that the country’s job market which is nearing full strength can withstand a tightening of rates while the pace of rate hikes will be based on upcoming economic data.
Data from the American Petroleum Institute showed that U.S. crude stocks rose by 942,000 barrels to 525.2 million barrels in the week to Aug. 26, topping analysts' expectations for an increase of 921,000 barrels. Official U.S. oil inventories data published by the EIA, is due later today, and is expected to show an increase of 1.1 million barrels last week.
Technical
AUDNZD
Fig: AUDNZD H4 Technical Chart
AUDNZD is on the last stages of a double-top pattern. The price surpassed the neck level at 1.04550 last week and fell deeper towards the major support at 1.04000, before pulling back to hit the 1.04550 handle. As we can see from the chart, this level has played an important part as a support zone previously, and is now returning as an important resistance at which the AUDNZD failed and was forced to reverse lower. The divergence between the +DI line and –DI line and a surging ADX index has helped the pair break through the 1.04000 level easily, and is expected to dampen the price lower.
Trade suggestion
Buy Digital Put Option from 1.03750 to 1.03350 valid until 20:00 GMT August 31, 2016
USDCHF
Fig: USDCHF H4 Technical Chart
USDCHF has pulled back from the solid resistance at 0.98420 after soaring more than 300 pips consistently, from the low at 0.95370. As a result of an overblown market where the bulls have been exhausted after a long period of time supporting prices higher, the U.S dollar is making some corrective moves. With the two MAs placed below the price action, the pair is expected to extend the rally.
Trade suggestion
Buy Digital Call Option from 0.98520 to 0.98775 valid until 20:00 GMT August 31, 2016
USDCAD
Fig: USDCAD H4 Technical Chart
USDCAD has been on the rise after breaking above the 23.6% Fibonacci retracement level at 1.28959. The market has once again entered overbought territory and reversed lower. Still, the directional strength index is pointing upwards, suggesting that the bull is prevailing in the market.
Trade suggestion
Buy Digital Call Option from 1.31000 to 1.31400 valid until 20:00 GMT August 31, 2016
SILVER
Fig: SILVER H4 Technical Chart
Silver has moved past the MA20 at 18.680 from below, but has kept floating under the MA50. The moving average has deterred every attempt by the market to break above this zone of resistance for the last two weeks. The silver market has been held inside bearish territory for some time now, which has helped push prices towards the 38.2% retracement level at 18.288.
Trade suggestion
Buy Digital Put Option from 18.660 to 18.520 valid until 20:00 GMT August 31, 2016
Natural Gas
Fig: Natural Gas H4 Technical Chart
Natural gas has entered into a phase of consolidation recently, after dropping back to the 2.811 support level. The price has penetrated the MA20 from above but still has support from the 50-period moving average, which is in the same zone as the current prices. The RSI and The Stochastics are both pointing towards a bearish market. As a result, natural gas is forecast to plummet below the 2.811 threshold.
Trade suggestion
Buy Digital Put Option from 2.810 to 2.775 valid until 20:00 GMT August 31, 2016
Nasdaq100
Fig: NASDAQ100 H4 Technical Chart
The Nasdaq100 index is on the verge of falling through the recent price range between the resistance at 4835.00 and the support at 4766.00. A convergence between the two MAs has occurred above the price action, after prices broke through both MA's from above yesterday. The RSI and Stochastics are both below the average level. Further falls may be on the way.
Trade suggestion
Buy Digital Put Option from 4766.00 to 4748.25 valid until 20:00 GMT August 31, 2016
Daily Technical Analysis by Option Banque
