At its MPC meeting on Thursday, the Bank of England (BOE) decided to keep interest rates unchanged at a record low of 0.5%, as the central bank was adopting a wait-and-watch approach to the monetary policy ahead of the June referendum. According to the BOE Inflation report, the British economy remains subdued as the twelve-month CPI inflation in March rose to 0.5% – still far below the target of 2% this year.
BOE Governor Mark Carney yesterday warned that a vote for Brexit next month could create an uncertain environment in the economy and a UK recession would become likelier.
The US Department of Labor reported yesterday that initial jobless claims for the week ending on May 07 came in at the highest level since February 2015. The latest data reported that 294,000 people filed for unemployment benefits in the above-mentioned week, compared with a reading of 274,000 in the week before. All data is seasonally adjusted.
Retail spending in New Zealand for the first quarter of 2016 was reported yesterday, continuing to increase thanks to the uptrend in the utilities sector. Statistics New Zealand reported that total retail sales (seasonally adjusted) for the quarter ending in March 2016 climbed 0.8% from the preceding reading of a 1.1% increase.
Data from the Finance Ministry on May 13 showed that China’s fiscal expenditures, inched up by 4.5% last month on yearly basis. This compares with a rise of 20.1% in March.
Meanwhile, the BOJ’s Kuroda today restated that to boost inflation to the target of 2%, the central bank will deploy more monetary easing policy measures, if required.
In the commodity market, oil prices witnessed a slight decline in early trading today, weighed down by a strong dollar and a potential supply overhang. The global benchmark, Brent, was down to $46.74/barrel, 0.7% lower than the previous close. In contrast, the gold price is on track to rise, currently at $1270.80/oz, up 0.6% from the last settlement.
Technicals
GBPUSD
GBPUSD has been moving sideways within a narrow range around 1.14468 for 10 days, under the pressure of the red parabolics above. RSI is hovering around level 42 and heading down, showing strong selling power in the pair. The price is anticipated to retest the support level at 1.43705, the lowest level from the beginning of this month.
Trade suggestion
Buy Digital Call Option at 1.43705 valid until May 13, 2016
Buy Digital Put Option at 1.44183 valid until May 13, 2016
USDCAD
USDCAD has just retreated from the support level at 1.27693, created on May 12, and is now trading at 1.28728. The red arrow’s appearance above the prices signals that the pair is in a bearish market. However, RSI is staying above level 50 and pointing up towards the overbought zone, indicating stronger buying power. The price may make another attempt at the resistance level around 1.30163, the highest level in more than a month.
Trade suggestion
Buy Digital Call Option at 1.28728 valid until May 13, 2016
Buy Digital Put Option at 1.30163 valid until May 13, 2016
CHFJPY
CHFJPY has been moving between the range of 109.730 and 112.790 since April 28. The pair is now trading at 111.567, with RSI hovering around level 45 and heading down. Although the green parabolics sar is moving below and supporting the price movement, the pair is expected to cross through the band and hit the support area at 109.730.
Trade suggestion
Buy Digital Call Option at 109.730 valid until May 13, 2016
Buy Digital Put Option at 111.567 valid until May 13, 2016
GOLD
Gold has retreated from the resistance at around 1303.70 after witnessing a strong surge in the last couple of weeks. The commodity is moving sideways around the zone of Fibonacci 38.2. RSI is staying at level 51 and seems headed down, forming a bearish setup. The price is expected to hit the area of Fibonacci 61.8 (1256.49) before bouncing back.
Trade suggestion
Buy Digital Call Option at 1256.49 valid until May 13, 2016
Buy Digital Put Option at 1274.52 valid until May 13, 2016
BRENT
Brent has retreated from the resistance at around 48.39, the highest level since the beginning of the month. The commodity is currently trading at 47.88. The RSI has just escaped from the overbought territory. Despite support from the moving average below, the price is expected to fall further and reach the support level at 46.88.
Trade suggestion
Buy Digital Call Option at 46.88 valid until May 13, 2016
Buy Digital Put Option at 47.88 valid until May 13, 2016
NASDAQ
NASDAQ has witnessed a strong downtrend as seen in the red parabolic SAR band, from April 21 to May 6. The index then bounced back and has just retreated since the red arrow re-appeared. RSI is hovering around level 37 and heading down, suggesting that the index is about to enter the oversold zone. The price is anticipated to drop further, testing the support at 4266.38, the lowest level in May, so far.
Trade suggestion
Buy Digital Call Option at 4266.38 valid until May 13, 2016
Buy Digital Put Option at 4310.50 valid until May 13, 2016
