Daily Market Analysis by CapitalStreetFX

[Long Le]

Daily report on June 28, 2016

On Tuesday, Sterling gained for the first time since Britain?s vote to exit from the European Union, as the recovery in investors? appetite for higher-yielding assets curbed the demand for US dollar, safe-haven gold and Japanese Yen.

The pound rose against its major counterparts, last trading at $1.3318 after hitting the 30-year low of $1.31129 on Monday. The US dollar index, measuring the strength of the greenback versus the basket of major currencies, dropped for the first time since the record market rout on Friday to 96.07, down 0.32% compared with the last settlement. Whereas, the Yen fell against most of its rivals, trading at 102.063JPY/USD after rocketing to 98.678JPY/USD at high speed.

Asian stocks trimmed their losses today on expectations that policy makers would take actions to stabilize financial markets after Brexit related panic. The MSCI Asia Pacific Index lost 0.4% to 125.23 after being down up to 1.2% earlier. Japan?s Topic index has pared its earlier declines of as much as 2.2% upon speculation that the Bank of Japan (BOJ) could intensify stimulus measures.

Gold reversed into a bearish tone after two days of reigning at the top - as investors sought safe-haven assets following the UK?s unexpected vote to leave the EU. The commodity was trading at $1317.22/oz, down more than 3% from yesterday?s high of $1358.24.

Oil prices inched up in early trading in Asia as a looming strike in Norway is likely to reduce output from Europe's biggest oil producer. Around 755 oil workers could go on strike starting Saturday if a new wage deal is not reached before Friday. US West Texas Immediate crude was trading at $47.19 per barrel, adding 1.15% compared with the last settlement, while Brent crude was up 0.87% to around $48.34 per barrel.

Technicals

EURUSD

EURUSD is currently moving sideways, in a wide range below the 23.6% mark of the Fibonacci retracement from 1.09685 to 1.10827. RSI (14) is up to to 43.32, even though thats not enough to confirm a trend change into an up move. It does however indicate strengthening bullish momentum. The pair is anticipated to fall back after a test of the firm resistance at 1.10714.

Trade suggestion

Sell limit at 1.10714, Stop loss at 1.11205, Take profit at 1.09896

GBPJPY

After testing the three-and-half year low of 133.194 for the second time, the British pound is moving up slightly against the safe-haven Japanese yen. ADX (14) has lowered to 36.4574, combined with shrinking distance between DI- and DI+. This indicates that the sellers are getting exhausted. Longs are encouraged in the short-term .

Trade suggestion

Buy stop at 136.736, Stop loss at 133.993, Take profit at 140.126

USDCAD

The level of 1.31104 is currently acting as firm resistance for prices as the pair failed to close far above this mark for several weeks. RSI (14) is turning downwards from the overbought point, implying that bears may attempt to overshadow the market. The support of 1.29647 is expected to be tested before any rise.

Trade suggestion

Buy limit at 1.29739, Stop loss at 1.29248, Take profit at 1.30345

GOLD

On June 14th, GOLD hit a record high around the 1358 level, as a fallout of the shock from the UK referendum?s results. However, the bull has weakened a little bit as the precious metal is fluctuating in an uncertain fashion since. RSI (14) has managed to escape from overbought territory. However, the price is expected to climb after consolidating for some time, as signaled by the trend indicator and two MA's

Trade suggestion

Buy stop at 1324.36, Stop loss at 1308.89, Take profit at 1344.95

WTI

WTI is extending its rise after hitting a six-week low of 46.04 on Monday. RSI (14) is edging up, but not crossing over the average level yet, indicating that the bear market is still relatively strong. The 28.2% Fibonacci has been a solid resistance lately and is expected to contain the price from surging higher. Short positions for the long-term are encouraged by the trend indicator

Trade suggestion

Sell limit at 47.60, Stop loss at 48.25, Take profit at 46.30

SP500

Creating a very big gap-down from a high of 2112.10 on Friday, the SP 500 is on course to plunge after failing to cover that gap. The two moving averages crossed below the price chart, casting a shadow on the index. The SP500 is expected to continue remaining under pressure from the two SMAs above. It may head down to break through the 38.2% level of Fibonacci retracement. More declines are awaited.

Trade suggestion

Sell stop at 1995.56, Stop loss at 2009.93, Take profit at 1980.31

daily-market-analysis-capitalstreetfx

[Long Le]

Daily Report on June 30, 2016

The greenback pared its gains against a basket of currencies in the trading session on Wednesday. The dollar index DXY turned down to a level of 95.59, nearly covering the big gap-up from earlier this week.

The slide was initiated by the soft data on turnover in the U.S real-estate sector. Yesterday, the National Association of Realtors reported that the total turnover amount related to pending sales retreated in May after advancing for three consecutive months.

Meanwhile, the safe-haven yen was on the defensive as risk aversion began to ease in the markets. The Japanese yen is currently flat around 102.783 per dollar.

Asian stocks climbed for a second day as investors shrugged off the anxiety resulting from the Brexit shock last week. The MSCI index rose 1.3%, up significantly from the one-month low formed on Friday. Australia?s ASX 200 hit the level of 5248.50, up 1% from the previous settlement.

The U.S Energy Information Administration department reported on Wednesday US crude inventories shrunk for the sixth straight week, with data showing a decline of more than 4 million barrels for the week ending on June 24. A fall in the amount of crude oil stashed in storage supported WTI crude to a high of $50.29/barrel yesterday. However, on Thursday, oil prices pared the gains and pulled back as jitters over strike outages in Norway faded.

Technicals

USDJPY

USDJPY has been moving sideways around the price area of 102.602 since the beginning of the week. After hitting firm resistance at 102.975, the pair gave up on its up-move and pulled back, heading downwards to the support at 102.028. The downtrend has just been confirmed by the RSI (14) which has already crossed below the 50 threshold from above.

Trade suggestion

Sell stop at 102.494, Stop loss at 102.835, Take profit at 101.972

EURUSD

EURUSD has been moving in a shrinking range and has fallen back under the 20-day moving average. The ADX has fallen to 26.84, combined with the DI- (red line) crossing over the DI+ (green line), signaling that the bear is gaining momentum. The pair is expected to continue ticking down and may break out of the range.

Trade suggestion

Sell stop at 1.10984, Stop loss at 1.11238, Take profit at 1.10630

AUDCAD

AUDCAD has been moving cautiously around the price area of 0.96372 for 2 days, after losing 1.75% from the one-week high of 0.97300. In general, the pair has been in an uptrend with the support of the 50-day moving average below since June 10. It is expected that the price will continue the sideways move and may then test the support level at around 0.96026.

Trade suggestion

Sell stop at 0.96255, Stop loss at 0.96404, Take profit at 0.96036

GOLD

Gold is currently trading around the price area of 1316.10. So far, the commodity has been moving aimlessly between the range of 1305.27 and 1335.46, just crossing the 10-day moving average from above and below. RSI is at near 54 and pointing down, which may push the price down slightly. The sideways movement is likely to prevail for the rest of the day, with a possible breakdown later on.

Trade suggestion

Sell stop at 1314.27, Stop loss at 1319.84, Take profit at 1306.95

BRENT

Brent price has retreated from the resistance area of 51.68 after 5 consecutive days of rises from around 47.26. RSI is still hovering at high level, suggesting a continued strong up move for the commodity. The price is anticipated to keep rising, after a short correction, and reach the resistance at 51.68 before reaching the overbought territory and falling back.

Trade suggestion

Buy stop at 50.92, Stop loss at 50.69, Take profit at 51.34

DOW JONES

The Dow Jones has been surging for 3 days from around 17057.13. The index, supported by the 50-day moving average below, was trading at 17695.00 last, up 0.05% compared with yesterday?s closing price. RSI is at level 56 and heading up, indicating strong buying power. The price is expected to hit the resistance area at 17923.12 soon.

Trade suggestion

Buy stop at 17735.21, Stop loss at 17667.23, Take profit at 17826.16