On Wednesday, Wall Street gained for the second session due to surging oil prices, and investors’ increasing expectations of an interest rate hike as soon as June or July. Combining the performance in Tuesday and Wednesday, the S&P 500 has been up 2%, witnessing the strongest two-day run since the beginning of March. In particular, the index inched 1.51% compared with the last settlement as oil prices were on track to hit $50 per barrel.
The dollar stayed defensive on Thursday as investors are awaiting for the speech of Federal Reserve President Janet Yellen, which is expected to give commentaries on another rate hike and the decisions on a planned sales tax hike in Japan. The dollar index inched down 0.1 percent to around 95.235, moving away from a two-month high of 95.661 formed in the previous session.
According to the US government figures, the crude oil inventories dropped 4.2 million barrels, beating market predictions of 1.7 million and supporting oil prices to go up. The commodity prices hit $50 per barrel in early Asian session today.
The Canadian dollar went up against the US dollar as oil prices gained and the bank of Canada statement showed less dovish signal than expected. In particular, the central bank decided to keep the interest rate at 0.5% on Wednesday, saying that the economy could shrink in the second quarter due to the recent wildfires in Alberta.
On Tuesday, the workers at Chinalto Mining Corp International’s copper mine Toromocho in Peru are planning a four-day strike to press the revise of the quarterly bonus policy, which is related to the company results. According to Alvaro Barrenechea, manager of corporate affairs for Toromocho, the workers did not receive bonus this quarter as the profit goals had not been met on copper slump.
Technicals
EURUSD
Fig. EURUSD H4 Technical Chart
Yesterday, EURUSD reached the lowest level of 1.11274 in over two months and now is on track to rise. The Stochastics charts shows that the %K line (blue line) is about to cross over the overbought point, indicating that the pair may pull back after some advances. The resistance of 1.12435 formed on Monday is expected to be retested. A short position in long-term is still suggested by the signal trend indicator.
Trade suggestion
Buy Digital Call Option at 1.11799 valid until May 26, 2016
Buy Digital Put Option at 1.11337 valid until May 26, 2016
GBPJPY
Fig. GBPJPY H4 Technical Chart
RSI (14) points up, hovering around the reading of 60, indicating that the bullish power is very strong. The pair GBPJPY is inching up after tracing a down-move for several hours, from a high of 162.474. The level 23.6% of Fibonacci seems to be a solid support of the price. A green arrow has appeared under the price chart on May 25, hinting a long position,
Trade suggestion
Buy Digital Call Option at 162.224 valid until May 26, 2016
Buy Digital Put Option at 161.000 valid until May 26, 2016
USDCAD
Fig. USDCAD H4 Technical Chart
The buck is on way to weaken against the Loonie after the pair USDCAD hit the resistance of 1.31896 two days ago. The two moving average started to hang above the price chart, casting shadow on this pair. The downtrend is anticipated to stay firm as ADX (14) is heading up to 36.9011. Though the price has entered the oversold territory, the %K line (blue line) gives no signal to cross the %D line (red line) in short-term. USDCAD is expected to dim further.
Trade suggestion
Buy Digital Call Option at 1.30360 valid until May 26, 2016
Buy Digital Put Option at 1.29082 valid until May 26, 2016
COPPER
Fig. COPPER H4 Technical Chart
ADX (14) is pointing up to the reading of 55.1441, with DI+ is far higher than DI-, indicating that the current uptrend is very powerful. The signal trend indicator has suggested a long position since yesterday via a green arrow under the price chart. The commodity may test the resistance of 2.1541. The current support is 2.0371.
Trade suggestion
Buy Digital Call Option at 2.1400 valid until May 26, 2016
Buy Digital Put Option at 2.0934 valid until May 26, 2016
DAX
Fig. DAX H4 Technical Chart
DAX has fallen into a consolidation after surging up sharply from the support of 9763.74 in the last two days. The Stochastics chart shows that the index has dived in the overbought territory for a period of time and the % K line (blue line) has already crossed the %D line (red line), implying that a reversal into a downtrend may happen soon.
Trade suggestion
Buy Digital Call Option at 10239.98 valid until May 26, 2016
Buy Digital Put Option at 10094.72 valid until May 26, 2016
SP500
Fig. SP500 H4 Technical Chart
RSI (14) currently is hovering around the overbought level, indicating that the bull is very strong. The %K line (blue line) has already crossed over the %D line (red line), signaling that the index may pull back for some consolidation. A long position is suggested by the green arrow under the price chart.
Trade suggestion
Buy Digital Call Option at 2100.46 valid until May 26, 2016
Buy Digital Put Option at 2087.66 valid until May 26, 2016
