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Daily Market Outlook
Asian Stocks slumped on Wednesday propelled by the plunging Oil price and overnight fall in US Stocks. Japanese Nikkei dropped 3.15 percent and ended at 1719.25, Hong Kong’s Hang Seng fell 2.34 percent and closed at 198991.59. Chinese CSI300 dropped slightly by 0.43 percent and ended at 2948.54 despite a private survey on China's services sector which reported today that growth rose to a six-month high in January .
Australian stocks also ended lower today with losses in the Energy , IT and Resources sector. The S&P/ASX200 dropped 2.88 percent ended at 4876.33 as 174 members out of 200 were down and 16 were up.
Oil climbed on Wednesday boosted by the comment from Russian Foreign Minister Sergei Lavrov as he said they are ready to meet if there is consensus among the OPEC and non-OPEC members in cutting Oil output. Crude Oil fell drastically from the starting of this week propelled by the overwhelming supply as U.S. crude oil stockpile increased by 3.8 million barrels to 500.4 million in the week to Jan. 29 according to the data from the American Petroleum Institute showed. Conversely,according to the forecast of US EIA, US Oil production will drop by 620k barrels a day, or about 7 percent, from the first quarter to the fourth while the International Energy Agency forecast that total non-OPEC supply will fall by 600,000 barrels a day this year.
EURUSD climbed 0.28 percent on Tuesday boosted by the progression in labor market. It is still in the consolidation range and trying to break higher exploiting current bullish momentum.
Fig: EURUSD Hourly Technical Chart
EURUSD is going higher being inside a range by creating a series of higher lows. Currently it is struggling in staying sustainably above the 1.0920. On the hourly chart, SMA50 crossed up SMA200. The intraday bias remains bullish as price remains above 1.0900 level. If it can break through the 1.09035 level it would lead it to retest the 1.100 for the 6th time as it made five abortive attempts before to break 1.100 level.
Buy Digital Calls above 1.0940. Digital Puts can be attempted at or above 1.0975.
GBPUSD slipped 0.17 percent on Tuesday in a choppy market after being rejected near 1.4450 level.
Fig: GBPUSD Hourly Technical Chart.
On the Hourly chart, GBPUSD is near the top of a wide upward channel and is struggling to break out higher of it. Price remains above SMA50 and SMA200. An acceleration in bullish momentum would help it to breach the 1.4450 level .A confidence break of 1.4450 level might drive it towards the next significant level at 1.4600. Conversely, it it break below 1.4360 it may go for deeper correction of recent short term rally.
Buy Digital Calls above 1.4455. Digital Puts can be bought below 1.4400 or above 1.4520.
USDJPY dropped 0.94 percent on Tuesday as slumping equity markets might increase the demand of safe haven currency Yen briefly.
Fig: USDJPY Hourly Technical Chart.
USDJPY is approaching towards a deeper correction against recent rally. Price has crossed below SMA50 and SMA200 and also Stochastic turned down lower level. Market lacks bullish momentum right now. The interim support level is @119.40. A breakdown below 119.00 would spur the current bearish momentum. On the other hand if USDJPY manages to breach 121.00 it would increase the volume of buyers.
It is better to stay cautious and avoid trading Yen right now.
AUDUSD pulled back strongly on Tuesday as RBA decided to keep interest rates on hold. It dropped 1.15 percent on Tuesday. Today it gained 0.21 percent after having an interim support @0.7000 level.
Fig: AUDUSD Hourly Technical Chart
AUSDUSD is approaching to test the immediate resistance @0.7070 after rebounding from the strong support at 0.70. Price coincides with moving averages while stochastic remains at lower level. If AUDUSD can breach the 0.7070 level and creates interim support there it might get potential to break through the 0.7100 level again. Conversely, downward acceleration would risk the major support @0.7000 a breakdown of which would initiate strong selloff.
No trade suggestion for AUDUSD right now as market is neutral.
XAUSUD has been wavering within small range of 1122.00-1130.00 for last two days after hitting the 1130.00 level on Monday by a strong rally.
Fig: XAUUSD Hourly Technical Chart.
On the Hourly chart, XAUSD is approaching to break higher maintaining a well establish upward sloping channel. Price remains above moving averages though stochastic turned down slightly because of recent sideways moves. It is currently accumulating potential to breach above the 1130.00 level . A sustained move above 1130.00 would pave the way towards 1143.00 level.
Buy Gold Digital Calls above 1131.00. Buy Gold Digital Puts on a break of 1120 or above 1138.00
Crude Oil recovered 1.22 percent today after plunging 14.44 percent in first two days of this trading week.
Fig: Crude Oil Hourly Technical Chart.
Crude Oil is currently sitting above the support level 30.10. It breached above the 30.00 level rebounding from the daily low @29.38. A sustained move above 30.10 would spur the current recovery towards 32.00 level. However failure to remain above the 30.0 level might accelerate the downward pressure again towards the28.00 level.
Buy Crude Oil Digital Calls on a break above 30.30. Buy Digital Puts on a close below 29.80
Copper has been in a strong rally since 18th January. It has climbed 0.95 percent so far today.
Fig: Copper Hourly Technical Chart
Copper is strongly bullish right now as buyers are pushing it higher after every dip. On the hourly and H4 charts, price remains above SMA50 and SMA200. Currently it is trying to breach above the major resistance level 2.074. A sustained move above 2.074 would pave the way towards 2.100.
Buy Copper Digital Calls above 2.0750. Puts could be attempted on a break below 2.066