During yesterday’s testimony before the Senate Banking Committee, FED President Yellen stated that the central bank felt no pressure to raise the US benchmark rate. Due to the dark clouds of slowdown in domestic growth, sluggish development in global economies and uncertainty over the “Brexit” referendum, the path to rate hikes needs to be followed cautiously.
Based on the Fed Chair’s comments, a rate hike in July looks completely off the table. Hence, the greenback on Tuesday continued its recent fall, with the dollar index closing at 93.94.
Meanwhile, the pound still remains supported as recent polls indicate rising momentum for the “Remain” camp in the “Brexit” referendum. However, as there are still several polls before the final vote on Britain’s continued membership of the European Union, the markets remain volatile as the overall situation remains uncertain.
Mario Draghi, the Chairman of the ECB, stated yesterday that the European Central Bank was ready to act with all instruments available to handle all contingencies related to the results of the UK referendum, if needed.
Recently, safe-haven assets like gold have lost their attraction for investors, as the possibilities of a “Brexit” ease. In the trading session on Tuesday, Gold marked a ten-day low of $1264.47/oz, down 2% from its previous close . Oil prices increased in early Asian trading on Wednesday, due to a larger-than-expected draw on inventories, reported by the American Petroleum Institute (API) on tuesday. The global benchmark, Brent crude oil, continues to sustain above the threshold of $50 per barrel.
Technicals
USDCHF
USDCHF has been locked in a range from 0.95801 to 0.96684. RSI (14) continues to stay under the 50 threshold, indicating that the bear is still overwhelming in the market. The parabolics band crawling above the price chart suggests a short position on this pair. If the price breaks the level 0 of the Fibonacci retracement successfully, more declines are expected.
Trade suggestion
Buy Digital Put Option from 0.95968 to 0.95475 valid until 20:00 June 22, 2016
EURJPY
The yen is tracing an up-move against euro after the pair EURJPY hit the resistance at 119.133. The trend indicator has signaled a short position since June 08, with a big move of 393 pips up to now. A bounce back is likely to happen soon as the two moving averages are getting closer to the price chart.
Trade suggestion
Buy Digital Call Option from 118.002 to 118.707 valid until 20:00 June 22, 2016
AUDNZD
The red trend indicator arrow has cast its shadow over the price chart since yesterday, encouraging short positions on the currency pair. Lower lows are supporting the current down move, not to mention ADX (14) which has headed up to 23.2447, while both lines of the Stochastic chart are plunging into the oversold area. The price is expected to extend its fall for the rest of the day.
Trade suggestion
Buy Digital Put Option from 1.04378 to 1.04083 valid until 20:00 June 22, 2016
COPPER
The trend indicator has formed a green arrow under the price chart since Monday, signaling a buyers’ market. RSI (14) is hovering around the overbought point, confirming a bullish market. The commodity is forecast to extend its way up, testing the resistance of 2.1436 and may then pull back.
Trade suggestion
Buy Digital Call Option from 2.1161 to 2.1328 valid until 20:00 June 22, 2016
WTI
Yesterday, WTI surged high from a low of 48.89 and is currently lingering around the level of 50.26. This is a solid resistance which has prevented the prices from soaring twice in the past. Higher highs are forming, with RSI (14) pointing towards the threshold of 70.The bull is confirmed with overwhelming strength. Further advances are expected as the trend indicator has signaled a long position two days ago, via a green arrow under the price chart.
Trade suggestion
Buy Digital Call Option from 50.38 to 51.29 valid until 20:00 June 22, 2016
DAX
DAX is on track to soar after creating a big gap-up early this week. ADX (14) is at a high reading of 47.3155, with DI+ staying far from DI-, which shows the current uptrend is very strong. The index is anticipated to benefit from the two moving averages below, and may edge up to the resistance of 10366.22. Long positions are suggested.
Trade suggestion
Buy Digital Call Option from 10081.37 to 10250.33 valid until 20:00 June 22, 2016
