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Asian equities ticked down on Wednesday, following in the steps of the U.S markets’ that also showed signs of retreat after the International Monetary Fund (IMF) cut its global growth forecasts for the next two years on Tuesday. The NASDAQ Composite index fell 0.38% to 5,036.37, while the S&P 500 also closed in the red as nine out of ten sectors were down.
On Tuesday, the IMF revised its forecast for global GDP growth to 3.1 percent this year, down from April’s 3.2 percent projection, citing the future effects of Britain leaving the European Union, which had created a “sizeable increase in uncertainty” that might weigh on global markets. Estimates of pickup in global growth in 2017 were also revised down to 3.4% from 3.5%. The Fund said that its updated forecast was based on the assumption that the historic divorce between Britain and the EU would not raise trade barriers between Britain and the EU on a large scale. However, in the “worst case” scenario that the negotiations break down and Britain falls into recession, global growth is seen sliding to 2.8 percent and 3.1 percent in 2016 and 2017, respectively.
The gloomy outlook for the global economy cast dark clouds over stock markets today and sent crude prices back below $45 per barrel as a result of decreasing demand projections. The oil price has suffered a loss of 2.8% in the last couple of days. The MSCI Asia Pacific Index was down nearly 0.1 percent, having halted a six-day winning streak.
Gold has been swinging between losses and gains for the last several days ahead of a European Central Bank meeting on Thursday and with mounting prospects of a U.S. rate hike sooner rather than later this year, which has contributed to supporting the greenback lately. The dollar index, is currently trading at 97.097, after touching a four-month peak of 97.158.
Fig: USDJPY H4 Technical Chart
USDJPY is back to its narrow range after trading in a wide range from July 04 to July 12. The pair has just bounced back from the lower trend line of the up-channel, and is heading up to record high of 106.800 formed one month ago. The bull is still reigning in the market as can be seen from the RSI is still above the level 50.
Buy Digital Call Option from 106.140 to 106.800 valid until 20:00 July 22, 2016
Fig: GBPUSD H4 Technical Chart
GBPUSD is on the last stage of its double shoulder pattern as the pair is retreating from the high of $1.33200. Further falls are expected as the two moving averages are moving closer with the short-term MA likely to cross over the long-term MA from above. RSI remains at the lows, nearing the oversold territory, suggesting resilient bearish momentum.
Buy Digital Put Option from 1.30490 to 1.28484 valid until 20:00 July 22, 2016
Fig: AUDUSD H4 Technical Chart
AUDUSD has broken through its price range and is moving above the 38.2% Fibonacci retracement at 0.74730. The pair may be stepping into a period of consolidation with zones of significant support at the lower levels. A break below the 38.2% level is expected as we are witnessing the divergence between the -DI line and +DI line. The next support to be tested is the 50.0% level at 0.74100.
Buy Digital Put Option from 0.75675 to 0.74100 valid until 20:00 July 22, 2016
Fig: SILVER H4 Technical Chart
SILVER is trading in an incredibly narrow range right above the 23.6% Fibonacci level at 19.885. The metal is anticipated to break through this support as bearish momentum has been building up since some time now. The MA20 has intercepted the MA50 from above and is expected to cross over. Additionally, Silver is also under the pressure of the parabolics sar band moving above the price action . Therefore, we expect to see a further slide.
Buy Digital Put Option from 19.770 to 19.410 valid until 20:00 July 22, 2016
Fig: WTI H4 Technical Chart
We are witnessing a resumption of falls in WTI crude prices after the market bounced back briefly last week. The market is expected to retest the support at $44.40. This support zone is the last major psychological level that could contain the U.S crude price from falling to two-and-a-half-month lows of $43 per barrel. In general the bear is still dominant in the market. The down candles having much bigger bodies than the up candles
Buy Digital Put Option from 44.30 to 43.00 valid until 20:00 July 22, 2016
Fig: FTSE H4 Technical Chart
The FTSE has been on a strong surge since the Brexit referendum, but has been moving sideways lately. Although the price action is currently above both moving averages, the distance between the MA’s and between the two MA’s is shrinking, suggesting that the bull is weakening. This advance is anticipated to peter out soon as ADX has fallen to 25.69 from the high of 59.80. The 11-month record high at 6745.00 is forecast to be the turning point for the index.
Buy Digital Put Option from 6745.00 to 6630.00 valid until 20:00 July 22, 2016