On Tuesday morning, the Finance minister of Japan stated that the authorities would take firm action to ease the speculation-driven movements in the yen if needed. The yen has surged excessively against its peers as investors have rushed into the so-called safe haven currency, due to rising concerns regarding the Brexit referendum in June and low odds of a rate hike at the FOMC meeting tomorrow. A stronger yen impacts Japanese exports by making them relatively more expensive for importers, and slows down the already low rates of growth in Japan.
Meanwhile, the Sterling is still staying fragile near a two-month low in today’s trading session on rising “Brexit” jitters. Recent polls show that the “Leave” campaign is taking the lead in the referendum scheduled on June 23, with odds of 53% in the Guardian/ICM polls.
National Australia Bank Limited reported on June 14 that business confidence fell for the third consecutive month in May, with a reading of 3. The reading for the preceding period was 5 points.
In the Asian trading session, stocks plunged ahead of the two-day FED meeting, which is expected to provide important insights on future US monetary policy. Japan’s Nikkei index extended its fall this week, skidding 1.5% today, after dipping 3.5% on Monday.
Today, oil prices continue falling, extending the declines of the last several days. The global benchmark, WTI, was at $48.95 per barrel, in comparison with the last close of $49.09 per barrel yesterday.
Technicals
USDJPY
Awaiting insights from the FOMC on monetary policy, the pair USDJPY is currently moving in a range between 105.728 and 106.596. The trend indicator has formed a red arrow above the price chart since the first day of June, suggesting a short position. Since then we have witnessed a substantial move of 365 pips up to now. The price is expected to reverse into an uptrend soon.
Trade suggestion
Buy Digital Call Option from 106.399 to 107.385 valid until 20:00 June 17, 2016
EURGBP
The euro is flying higher against the sterling after the second failure to break the support of 0.78743. RSI (14) is nearing the threshold of 70, in a possible attempt to enter overbought territory once again. This means that the bulls are not likely to die down in the short-term, and the pair may climb further. The level of 0.80185 is expected to be tested.
Trade suggestion
Buy Digital Call Option from 0.79652 to 0.80098 valid until 20:00 June 17, 2016
AUDUSD
AUDUSD has been moving in an unclear fashion lately, with a range from 0.73577 to 0.74106. Early yesterday, the trend indicator has signaled a short position on the pair via a red arrow hanging over the price chart. Hence, AUDUSD is expected to resume its recent fall from a one-month high of 0.75033 soon, and may test the support of 0.73577.
Trade suggestion
Buy Digital Put Option from 0.73525 to 0.73116 valid until 20:00 June 17, 2016
GOLD
In the Asian trading session on Tuesday, GOLD retreated slightly from the resistance of 1287.18, which was formed yesterday. The bullish power seems to be exhausted after a long period of strong and sharp price spurts. The trend indicator is shows that the precious metal has made a significant move of 390 pips since June 03. Technically, the price is anticipated to edge down. RSI (14) has also escaped the overbought zone.
Trade suggestion
Buy Digital Put Option from 1278.71 to 1267.14 valid until 20:00 June 17, 2016
BRENT
Early this week, BRENT has broken the upward sloping trend line of the last several months while creating a gap-down. ADX (14) is heading up to the reading of 48.5782, with DI- far higher than DI+, which indicates that the selling power is very strong. The trend indicator has encouraged a short position since June 13.
Trade suggestion
Buy Digital Put Option from 49.77 to 49.04 valid until 20:00 June 17, 2016
FTSE
The stochastics chart shows that FTSE has dived into oversold territory since some time now, and the %K line (red line) is still sticking with the %D line (blue line), unveiling no clear direction. The price is inching up after hitting a low of 6014.00. The trend indicator still suggests a short position on the index. Therefore, the current bounce back seems like a correction, before the index resumes its fall.
Trade suggestion
Buy Digital Put Option from 6023.93 to 5988.15 valid until 20:00 June 17, 2016
