Two days before the UK referendum on European Union membership, the “Remain” camp has recovered some ground as a recent poll indicated that the percentage of people supporting Britain to stick with the EU rose to around 78%. Hence, the sterling stayed firm, holding near a three-week high against the US dollar.
As expectations that the UK may opt to remain in the EU grow stronger, investors paused for breath during the Asian trading session on Tuesday, after many days of market rallies. Asian stocks got off to a tentative start this morning.
Meanwhile, the dollar index DXY, still hovers around a low of 93.59 due to the dovish stance of the Federal Reserve Bank on monetary policy. Later today, FED Chairwoman Janet Yellen will testify before the Senate Banking Committee. Markets are turning their focus to her comments regarding the current state of the economy and any indications on the timing of future US rate hikes.
The Australian Bureau of Statistics late yesterday released the house price index for the first quarter in 2016, with an unexpected decline of 0.2% from the previous period. Economists’ had forecast the number to come in at 0.8% for the last quarter.
On Monday, Saudi Arabia reported that its crude oil exports for April dropped to 7.444 million barrels per day (bpd), compared to 7.541 mbpd in March. On the same day, Iran indicated that it will increase its crude exports capacity, which may stir the energy market further. Early in today’s session, oil prices slid slightly for the first time in three days. WTI is currently at $49.84/barrel, near a one-week high.
Technicals
USDJPY
USDJPY has retreated slightly from around 103.456, under pressure from the red parabolics band above. Overall, the pair has just escaped the oversold zone with RSI hovering around level 34 and pointing up. ADX is at 32, with DI+ (green line) beginning to turn its head up, signaling that a bullish trend is about to be formed. The price is anticipated to test the resistance level at 104.648 before dropping back.
Trade suggestion
Buy Digital Call Option from 103.456 to 104.648 valid until 20:00 June 24, 2016
EURGBP
The sterling has gained continuously against the Euro since the middle of June, especially after the killing of lawmaker Jo Cox, as it has powered the remain camp in a sympathy wave. The pair EURGBP has witnessed a hard fall from around 0.79934, taking pressure from the 10-day and 50-day moving averages above. The trend indicator is suggesting short positions. The pair is now in the oversold zone, and is expected to test the support at 0.76885. From there a reversal may occur.
Trade suggestion
Buy Digital Put Option from 0.77197 to 0.76885 valid until 20:00 June 24, 2016
CADCHF
CADCHF had been moving sideways around the area of 0.75967 before plunging strongly to the two-month low of 0.73803. The two moving averages have crossed below the price movement and are supporting the price from below. Combined with RSI pointing to level 50, the indicators suggest that the pair is now recovering from the lows. The trend indicator encourages long positions since the appearance of the green arrow, indicating a continuing rise for the pair. A retest of the resistance at 0.75966 could happen soon.
Trade suggestion
Buy Digital Call Option from 0.75144 to 0.75967 valid until 20:00 June 24, 2016
GOLD
Gold has been moving cautiously around the area of Fibonacci 23.6% after suddenly slipping from the highs at $1315.44/oz. RSI is around level 50 and seems to be heading down. This indicates the possibility of a bearish market after a brief period of trading sideways. The price is anticipated to trade sideways for some time, and may then witness a slide to the area of Fibonacci 50.0 (around 1261.49). A bounce-back(if any) could occur from that support.
Trade suggestion
Buy Digital Put Option from 1285.40 to 1274.15 valid until 20:00 June 24, 2016
BRENT
Brent prices plunged continuously for most of last week from highs around 53.02 with a wide gap from the parabolics band above. Currently, the commodity is trading around 50.84, lingering around the area of Fibonacci 61.8. RSI is now in the overbought territory, suggesting an upcoming reversal for the market. It is expected that the commodity could fall back and hit the support area at 50.17 before any further bounce back.
Trade suggestion
Buy Digital Put Option from 50.86 to 50.17 valid until 20:00 June 24, 2016
FTSE
FTSE has retreated slightly from the resistance level at 6181.2, escaping from the overbought territory. RSI is at level 57 and pointing down. ADX is at 34, along with DI- (red line) beginning to turn its head up towards DI+ (green line), suggesting a bear market formation in the making. The index is likely to continue going down, covering the gap created over the weekend.
Trade suggestion
Buy Digital Put Option from 6096.0 to 5997.6 valid until 20:00 June 24, 2016
