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China’s Manufacturing Purchasing Managers Index (PMI) dropped to a three years low at 49.4 against forecasted 49.6 in January according to data released on Monday. The PMI data has been under 50.00 level for a record successive six months which is signaling sustained deterioration as index below 50.0 indicates contraction and above 50.0 indicates expansion. The Caixin China Manufacturing PMI signaled modest deterioration in January as data improved to 48.4 from 48.2 in December. Chinese stocks fell on Monday after the data released. Chinese Shanghai Shenzhen CSI 300 Index dropped 1.53 percent to 2901.48, Shanghai Composite Index dropped 1.78% to 2688.854.
UK Manufacturing PMI in January rose to 52.9 from 52.1 in December, signaling progress in UK manufacturing sector at the start of 2016. It has been up for a successive 34 months which represents the sustained growth in manufacturing sector. The main drivers of the output growth acceleration were the consumer and investment goods sectors. A solid rate of expansion was also achieved by intermediate goods producers. The performance of large sized manufacturers was especially positive, whereas growth was comparatively moderate at SMEs.
Oil slumped about 4 percent propelled by the weakening of the Chinese economic data as China is the world’s largest energy consumer. The down talk from trustful OPEC source on the issue of emergency meeting to balance Oil supply and demand may also accelerate the decline. A senior OPEC source commented in a Saudi Arabian newspaper that it was too early to talk about an emergency meeting of the OPEC.
EURUSD ended the last week with a weekly gain of 0.34%. It was up by 1.32% in first four trading days of last week as a strong rally pushed it higher to 1.0966 from 1.0790. But on Friday it tumbled 0.98% which faded out most of the weekly gain and trimmed the gain to 0.34%.
Fig: EURUSD H4 Technical Chart
EURUSD has been wavering between 1.0710 to 1.1050 since 15th December, 2015 .On the H4 chart, market remains in consolidation mode while both SMA50 & SMA200 are flat and stochastic is slightly bended down being at high level . An inverted hammer candlestick bar formed on the weekly chart after the end of last week which indicates bearish reversal. If EURUSD can breach below the 1.0800 level it might increase the volume of sellers and spur momentum towards further downside.
Buy Put Options below 1.0780. Buy Call Options on a break above 1.0880 or at/below 1.0660.
GBPUSD dropped 0.17% in last week. It tumbled 0.82 percent on Friday followed by an abortive attempt to breakout higher.
Fig: GBPUSD H4 Technical Chart
On the H4 chart, Stochastic started to bent down after the drastic fall on Friday. Cable broke confidently the upward sloping diagonal formed by a series of higher lows on Friday. . It has climbed 0.38% so far today. Currently it is retesting the broken upward sloping diagonal. The immediate resistance level right now is @1.4308 a rejection from which would initiate another stage of selloff this week.
Put Options Preferred on a break of 1.4260. Call Options can be attempted on a break above 1.4350 or at the 1.4070 support level.
USDJPY climbed 1.95% on Friday boosted by the BOJ’s announcement of adopting negative interest rate. It ended the week @121.12 gaining 2.1%.
Fig: USDJPY H4 Technical Chart.
USDJPY has been in a strong rally for last two weeks. On the H4 chart, price has crossed up above both SMA50 & SMA200 and also Stochastic remained at higher level. It broke through the resistance zone 120.30-120.60 level on Friday which is expected to work as interim support zone. USDJPY might test the next significant resistance level @123.50 this week spurred by the current strong bullish momentum.
Buy Digital Call Options above 121.30. Put Options can be attempted on a break below 119.80 or at the 122.75 resistance
AUDUSD rose 1.3874% in last week. AUD was comparatively stronger against USD than other main rivals of USD as it gained 0.05% on Friday while EURUSD and GBPUSD dropped respectively 0.98% and 0.82%.
Fig: AUDUSD H4 Technical Chart
AUDUSD competed 61.8% retracement against strong selloff from 31st December 2015 to 15th January ,2016 on Friday and slipped slightly after the completion. On the H4 chart, price is above SMA50 & SMA200 and Stochastic is also up but SMA50 is still below of SMA200. The nearby support level in AUDUSD is 0.7044.If it can hold price above the support zone it would perform another stage of rally. A sustained move above 0.7135 might pave the way towards 0.7210 level. Conversely a breakdown below 0.7040 may initiate strong selloff.
Buy Digital Call Options above 0.7140. Buy Digital Put Options on a break below 0.7020.
XAUUSD climbed 1.60% in last week. It made a fresh 12 week high @ 127.95 on Wednesday last week but a erratic fall dragged it down to 1108.27. Rebounding from there XAUUSD ended last week @1117.69. It gained 0.18% on Friday.
Fig: XAUUSD H4 Technical Chart.
On the H4 Chart price is still in bullish territory as price remains above SMA50 & SMA200 and SMA50 is above SMA200 while Stochastic slightly bends down. It created interim support @1108.27 which acted as resistance zone previously. If the current support holds it might make another attempt to break higher towards 1136 in this week. Conversely if it breaches below 1108.00 level it may initiate strong selloff.
Buy Digital Call Options above 1122.50 all the way till 1133.50. buy Digital Put Options bellow 1108.00 all the way till 1098.00.
Crude Oil gained 5.36% in last week in a turmoil market . It climbed 1.61% on Friday. Today It has slumped 3.58% so far.
Fig: USOil H4 Technical Chart
Crude Oil failed to sustain above 34.30 after breaching it on Thursday, last week . It ended the last week @33.66 level creating interim support @32.56. Today it broke through the 32.56 support. Now the immediate major support is at 31.68 level a breakdown of which would spur the current bearish momentum. Conversely, a sustained move above 34.30 would open up the door towards 38.00 level.
Buy Digital Call Options on a close above 34.50 all the way till 36.50. Buy Digital Put Options on a break below 31.50.