Oil extended its recent gains in Asian trading on Monday due to a weaker U.S dollar and reduced worries over Britain’s possible exit from the European Union. Brent crude for August delivery witnessed a 48 cents gain up to $49.65 after closing at $49.17 on Friday, while WTI crude gained 1 percent to $48.44 a barrel compared with the last settlement.
The sterling jumped on Monday as opinion polls reported that the number of people voting for Britain to stay in the EU acquired a lead over the Leave Camp. According to the ComRes poll published on Saturday night, the number of people preferring Brexit dropped to 38% after the murder of Jo Cox, from 45% before the news. This swing has helped underpin risk sentiment and sent the safe-haven yen tumbling.
The pound gained 1.6% against the US dollar to as high as $1.4589, extending the recovery from last Thursday’s two month low of $1.4013. The currency added more than 2% to 153.173 yen, pulling away from the lowest level in three years of around 145.340 on Thursday.
Reduced worries on Brexit also help the Japan’s Nikkei soar to the highest level in one week, posting the biggest daily gain in two months. The Nikkei share average added 2.3% to 15,965.30, the highest level since June 13, achieving the biggest daily gain since April 21.
Ahead of the “Brexit” referendum, Federal Reserve Chair Janet Yellen will have a monetary policy testimony on Tuesday and Wednesday in front of lawmakers at the U.S. House of Representatives, which will attract investors’ attention and may cause unexpected volatility in the markets.
Technicals
EURUSD
EURUSD has just escaped the overbought territory with RSI hovering around level 61 and heading down. ADX is at 26, along with DI- (red line) beginning to point up towards DI+ (green line), suggesting a stronger selling trend. The pair is anticipated to continue the current down-move and cover the gap formed last week, and may test the support level at around 1.12294.
Trade suggestion
Buy Digital Put Option from 1.13482 to 1.12294 valid until 20:00 June 20, 2016
GBPJPY
The sterling is on track to gain as high as 153.173 against the Japanese Yen. The pair GBPJPY, which has crossed above the two moving averages, is about to enter the overbought territory as seen in the RSI staying above level 60 and pointing up. The ADX is now at level 36, combined with DI+ (green line) hovering above DI-, indicating strong bullishness. Long positions are encouraged.
Trade suggestion
Buy Digital Call Option from 153.426 to 155.255 valid until 20:00 June 20, 2016
USDCAD
USDCAD is tiptoeing around the area of Fibonacci retracement 38.2% after falling significantly from 1.30857. The RSI’s reading is now at level 42 and pointing to the oversold zone, suggesting a strong selling trend, especially when the current support at 38.2% is not a firm one. The pair is anticipated to trade sideways around the price area of 1.28286 for some time, and may then resume the fall and test the zone of Fibonacci 23.6%.
Trade suggestion
Buy Digital Put Option from 1.28286 to 1.27693 valid until 20:00 June 20, 2016
SILVER
After moving cautiously around the price area of 17.363, silver broke the sideways pattern and headed to test the 1-1/2 month high of 17.830. The DI+ (green line) has crossed up over the DI- (red line) and is still pointing up, suggesting a continued bull market. With RSI about to enter the overbought zone, the commodity is likely to retest the resistance level at 17.830 soon.
Trade suggestion
Buy Digital Call Option from 17.512 to 17.830 valid until 20:00 June 20, 2016
WTI
WTI has been recovering ground since friday, after witnessing a strong fall to the lowest level in more than a month at $46.39. ADX is now at 42.89, along with DI+ (green line) soaring away from DI- (red line), signaling a dominant bullish trend. The commodity is expected to continue the current up-move, and may test the zone of Fibonacci retracement 61.8% before pulling back.
Trade suggestion
Buy Digital Call Option from 49.42 to 49.92 valid until 20:00 June 20, 2016
SP500
SP500 has been moving between the range of 2049.31 and 2084.89 for more than a week. The index has turned to below the 50-day moving average and the red parabolics band, suggesting a bearish market formation. With RSI hovering below the level 50, the price is expected to retest the support level at 2049.31. It may then bounce back and create a double-bottom.
Trade suggestion
Buy Digital Put Option from 2078.00 to 2049.31 valid until 20:00 June 20, 2016
