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In the early Asian trading session on Wednesday, the yen slid as investors priced in the increasing possibility that the Bank of Japan would deploy significant monetary stimulus by the end of this week. The central bank is scheduled to hold its fifth meeting in 2016 on July 29th. This morning, the Japanese yen fell about 1.9% from the closing price yesterday, to trade at 117.141 per euro. Japan’s Nikkei index, rose by 2.6% to a high of 16840.00 today’s morning, on the back of a weaker yen.
The dollar index DXY, stood firm at 97.25 in early trading, about 30 cents lower than a four-month high of 97.57created two days earlier. The U.S Federal Reserve will conclude its FOMC meeting on Wednesday. The Fed is widely expected to keep the US benchmark rates steady. Some FED officials have opined that the central bank would like to see more evidence of a pickup in inflation for further tightening of monetary policy.
The Australian Bureau of Statistics reported earlier today that consumer prices rose by 0.4% in the second quarter of this year, compared to a fall of 0.2% in the preceding period. On a yearly basis, Australia’s CPI in the June quarter increased by 1.0% over the twelve months, in comparison with an annualized rate of 1.3% in the quarter ending in March 2016.
In china, the National Bureau of Statistics reported that profits earned by Chinese industrial firms grew at a rapid pace in the last three months. Profits in June rose 5.1% to 616.31 billion yuan. Total profits for the first half of 2016 came in at 3.00 trillion yuan, up 6.2% from the same period last year.
Oil prices hovered near recent lows in today’s Asian trading session as rising concerns of plentiful supply and slowing economic growth weigh over the market. WTI crude traded at $43.08/barrel, a little higher than the last settlement of $42.88/barrel.
Fig. EURGBP H4 Technical Chart
After attempting a test of the support at 0.83472, the euro is ticking up gradually against the sterling. The price action is brushing against the two moving averages, indicating a decisive point in the market. The price action has previously crossed the MA’s from above and below and is currently attempting to stabilize above the MA’s. Further advances on the pair are expected. The solid resistance of 0.84267 is likely to be tested once again. The trend indicator encourages a long position on EURGBP.
Buy Digital Call Option from 0.83767 to 0.83985 valid until 19:00 July 27, 2016
Fig. GBPJPY H4 Technical Chart
Yesterday, GBPJPY hit the 50.0% Fibonacci retracement level, around the area of 135.952. Since then, the pair has surged higher on the back of a weakening Japanese yen. RSI (14) is pointing upwards from the oversold threshold, implying that the bull is stepping in and is about to take the lead in the market. The MA 100 line is likely to be pierced from under by the price action. The confirmation cross over the MA 100 line is awaited.
Buy Digital Call Option from 138.586 to 139.668 valid until 20:00 July 29, 2016
Fig. NZDUSD H4 Technical Chart
The Kiwi has been relatively quiet versus the US dollar after rising strongly and hitting the firm resistance of 0.70849 on Tuesday. RSI (14) stands at the reading of 54.5810, indicating that both buyers and the sellers are acting pretty indecisively. However, the price action has already crossed through the two MAs from below, not to mention the parabolics SAR band placed below the price action. This shows that the pair may find some momentum to climb higher in the near future.
Buy Digital Call Option from 0.70474 to 0.70755 valid until 19:00 July 27, 2016
Fig. PLATINUM H4 Technical Chart
The Platinum price has been moving cautiously around the price area of 1092.53 for more than 3 weeks now. The bear seems to be attempting a solidification of its position as seen in the –DI (red line) having crossed the +DI (green line) to head higher. However, the RSI is hovering at 56.76, combined with the two moving averages – long term and short-term, providing support from below the price action. This is anticipated to push the price higher after the sideways movement ends.
Buy Digital Call Option from 1093.78 to 1102.15 valid until 19:00 July 27, 2016
Fig. BRENT H4 Technical Chart
Brent prices have recovered slightly from the support area of 44.04 after two days of drops. RSI is lingering at level 39.90 and pointing up, suggesting that the commodity has escaped from the oversold zone. The –DI (red line) has turned down towards the +DI (green line), signaling a weakening bear market. The up-move is expected to continue and the price may test the resistance of 45.82. After that, a retreat may occur.
Buy Digital Call Option from 44.80 to 45.58 valid until 20:00 July 29, 2016
Fig. SP500 H4 Technical Chart
SP500 has been moving sideways between the range of 2156.60 and 2177.66 after the significant gains made over the past 3 weeks. RSI is heading into the overbought zone with a reading of 54.21, which can signify the forming of a bullish formation for the index. The price is also supported by the two moving averages below, suggesting a continuing surge. The trend indicator, which is showing a gain of 9837 points accumulated in the long position first suggested in the 3rd week of june, still indicates buying the index. The sideways move is anticipated to last a little more. The resistance of 2177.66 is likely to be retested soon.
Buy Digital Put Option from 2171.53 to 2156.29 valid until 19:00 July 27, 2016