Early this week, Federal Bank of New York announced that manufacturing activity in New York witnessed a sharp decline according to a survey in May 2016. Having posed a nine-month high at 9.6 points in April, the Empire state manufacturing index suddenly plummeted to a reading of -9 in May, well below the forecast of 7.2 by economists.
After that, the greenback weakened against its peers. The dollar index DXY tumbled to 94.47. However, the US dollar is firming up today as markets have an eye on the minutes form the FOMC’s April meeting, to gather clues of a rate hike at next month’s FOMC meeting.
On Monday, Bank of England Governor Mark Carney stated that the central bank is not likely to use a negative interest rate as has been done by the ECB or BOJ. With normal rate policy, they still have room for any adjustments if necessary.
By contrast, the Reserve Bank of Australia (RBA) hinted that more rate cuts in the near future are possible as this economy is currently facing weak inflation. On May 03, RBA surprised markets by opting to lower the benchmark to 1.75% from the previous record low of 2.00%.
According to a quarterly report released by the Reverse Bank of New Zealand late yesterday, for the quarter ending in April 2016, NZ inflation over the next two years was estimated to stayed unchanged at 1.6%, a record low in the last 22 years.
In Asian trading session on Tuesday, crude oil prices rocketed to the highest level in six months as concerns of oversupply have faded due to recent disruptions in Nigeria and Venezuela. The global benchmark, Brent, extended its way up, rising to $49.50 per barrel, up 17 cents from the last settlement. Today, gold also edged up to $1279.98/ounce, 0.5% higher than its last close.
Technicals
GBPUSD
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Fig. GBPUSD H4 Technical Chart
After hitting the support of 1.43271 yesterday, GBPUSD is surging up and rocketing towards overbought territory. The %K line (blue line) and the %D line (red line) are converging, and a reversal into a downtrend is hinted. The price is expected to retest the resistance of 1.45312 before pulling back. The signal trend indicator has suggested a short position since May 04.
Trade suggestion
Buy Digital Call Option at 1.43913 valid until May 20, 2016
Buy Digital Put Option at 1.44641 valid until May 20, 2016
EURJPY
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Fig. EURJPY H4 Technical Chart
Currently, the yen is on its way to strengthening against the euro, putting downward pressure on the pair EURJPY. The pair is pulling back from the resistance of 123.515. The SMA 14 (green line) has already crossed below the SMA 21 (red line), indicating that bears are overshadowing the market. However, RSI (14) is hovering around the average. The price is expected to move sideways for a while before moving into a downtrend.
Trade suggestion
Buy Digital Call Option at 122.864 valid until May 20, 2016
Buy Digital Put Option at 123.127 valid until May 20, 2016
AUDNZD
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Fig. AUDNZD H4 Technical Chart
RSI (14) has passed through the level 50 and is pointing upwards, implying that the bullishness is rising. AUDNZD is climbing up after reaching the support of 1.06819 formed on last Friday. The pair is expected to bounce back for some consolidation and then return into the current downtrend. The red arrow hanging over the price chart signals a selling position.
Trade suggestion
Buy Digital Call Option at 1.07343 valid until May 20, 2016
Buy Digital Put Option at 1.07629 valid until May 20, 2016
SILVER
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Fig. SILVER H4 Technical Chart
Recently, SILVER has moved in an uncertain fashion within a wide range, with the current support and resistance at 16.781 and 17.559 respectively. The two moving averages have just crossed, giving no clear direction for the price movement. The commodity seems to inch up for several hours and then pull back. The trend indicator has signaled a down-move.
Trade suggestion
Buy Digital Call Option at 17.277 valid until May 20, 2016
Buy Digital Put Option at 17.390 valid until May 20, 2016
WTI
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Fig. WTI H4 Technical Chart
WTI has been extending its strongest uptrend in several months. The Stochastics chart shows that the commodity has dived into the overbought territory since some time now. However, a reversal into a downtrend seems unlikely anytime soon as the %K line (blue line) refuses to cross the %D line (red line). ADX (14) is heading up, indicating that the up-move is still very strong. The next resistance to test is 49.92.
Trade suggestion
Buy Digital Call Option at 48.89 valid until May 20, 2016
Buy Digital Put Option at 49.75 valid until May 20, 2016
DAX
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Fig. DAX H4 Technical Chart
DAX opened today’s trading session with a big gap down and promptly covered this gap. The index attempted to break the level 50.0% of Fibonacci retracement but failed to close above this area. This level of Fibonacci is expected to now turn into a solid resistance. The index is expected to continue stumbling as a red arrow has already appeared above the price chart.
Trade suggestion
Buy Digital Call Option at 9760.21 valid until May 20, 2016
Buy Digital Put Option at 9884.09 valid until May 20, 2016
