Daily Report on January 18, 2017
European equities opened higher while Asian stock markets stabilized near three-month highs on Wednesday, pushed higher by Hong Kong and Chinese shares. The MSCI's ex-Japan Asia-Pacific shares index advanced 0.4 percent, just shy of a three-month high hit last Thursday. Hong Kong’s Hang Seng rose 1.2 percent and continued its run to the highest level since November. Meanwhile, Tokyo shares erased losses as yen retreated.
Gold and Japanese yen lost ground for the first time in eight trading session although the U.S. dollar remained weak. The greenback fell against most peers after president-elect Donald Trump told the Wall Street Journal that the dollar is “too strong” while China holds down its own currency. Chinese shares gained amid speculation of state efforts to ensure market stability during President Xi Jinping’s appearance at the World Economic Forum in Davos.
The pound witnessed its biggest daily advance against the dollar since the global financial crisis on Tuesday, after Prime Minister Theresa May said U.K. lawmakers will get a vote on the final deal for an exit from the trading bloc. In a highly anticipated speech on Tuesday, PM May planned out the government’s Brexit strategy which involves pulling out of the EU’s single market.
The U.S. Energy Information Administration on Tuesday said that U.S. shale production was set to snap a three-month decline in February. Due to the fact that energy firms have been boosting drilling activity with crude prices hovering near 18-month highs, February production is forecast to edge up 40,750 barrels per day (bpd) to 4.748 million bpd, marking the first month-on-month increase in production since October.
In New Zealand, overall prices in the latest Global Dairy Trade (GDT) auction rose for the first time in three auctions. The index gained 0.6% to $3,517 following a 3.9% decline in the first auction of 2017, broadly in line with consensus expectations of a slight improvement.
Fig: AUDCAD H4 Technical Chart
AUDCAD has been swinging back and forth around the 50.0% Fibonacci since Tuesday, despite support from short-term MA20. As indicated by RSI index, buyers are overwhelming in the market, which may help the pair break out of the current trading range to surge higher.
Buy Stop at 0.98800, Take profit at 0.99200, Stop loss at 0.98600
Fig: EURNZD H4 Technical Chart
EURNZD has fallen back below the support at 1.48500 after brief correction. The pair looks set to extend its downtrend with bearish force reigning in the market. While RSI is heading towards the oversold zone, ADX index is edging higher, suggesting strong sellers.
Sell Stop at 1.48300, Take profit at 1.47700, Stop loss at 1.48600
Fig: WTI H4 Technical Chart
WTI crude prices have breached the support at 52.30 and also returned to the trading range formed by lower highs and lower lows. The price action has crossed over the moving averages from above, indicating a reversal into a down trend. The support at 51.50 is within the sight.
Sell Stop at 52.00, Take profit at 51.50, Stop loss at 52.25
EURO 50 Index
Fig: EURO 50 Index H4 Technical Chart
Euro 50 Index opened higher but soon pared all of its gains in early trade to head lower. It seems like the index failed to resist the resistance at 3300.00 and two MAs that are hanging above the price action. The stock benchmark may find its support at 3260.00.
Sell Stop at 3280.00, Take profit at 3260.00, Stop loss at 3290.00