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Forex Forum to Share, Discuss, Communicate and Trade Forex • Market Outlook by Capital Street FX
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Re: Market Outlook by Capital Street FX

PostPosted: Wed Oct 12, 2016 8:00 pm
by CSFX.Support
Gold Moves Indecisively Ahead of FOMC Meeting Minutes – Will 1250.00 Threshold Be Broken?

Gold rose in the early part of the Asian trading session in the wake of a retreating U.S dollar, but has been edging lower in early European trading hours as the greenback claimed back its strength ahead of the release of the minutes from the September FOMC meeting, which are due to be released later today.

The precious metal has lost about 10% compared to the 28 month peak level of $1375.00 per ounce recorded in early July this year. Particularly, since September 28th, gold has dropped more than 6.7% amid signs of improving U.S. economic data and hawkish comments from Fed officials that have fueled expectations that the U.S Federal Reserve will raise interest rates by the year end.

Minutes from the September meeting of the Federal Reserve Open Market Committee (FOMC) are scheduled to be released at 18:00 GMT on Wednesday. At the last meting, policy makers left the federal funds rate target unchanged and maintained the target range of 0.25% to 0.5%. However, 3 of the 10 voting members of the FOMC including Boston Fed President Eric Rosengren had dissented the decision, and voted for a rate increase instead.

Rosengren has been considered as being dovish for a long time, as he has supported ultra-low rates in order to push down unemployment. With the number of new jobs added remaining steady month after month, and the jobless rate at or below 5 percent so far this year, Rosengren urged his colleagues to tighten policy to avoid overheating the labor market and triggering inflation.

The minutes are expected to provide markets with more details about the division within Fed officials. A hawkish leaning within the Fed, may cement the likelihood of a hike in December and consequently push up the U.S dollar. Traders have priced in only an 8.3% probability that the Fed will raise rates at its November meeting, but the chance of such a move by mid-December has risen to nearly 70%, according to the CME’s Fed Watch Tool.

The yellow metal is highly sensitive to U.S. interest rates. Not only will a strengthening greenback reduce gold’s appeal as it makes the dollar-denominated asset more expensive for investors holding other currencies, but higher yields from interest-bearing assets such as bonds will also dampen the metal’s competitiveness.

As stated by the Associated Chambers of Commerce of India, the country’s gold imports declined by 58.96% to 270 tons in the period January to September 2016, from 658 tons that were imported during the same period last year. According to the research report, gold imports declined partly due to a prolonged strike by jewelers in March and April to demand a roll back of the 1% excise duty that was imposed on gold and silver jewelry.

Another reason for the downturn in Indian gold imports is the continuation of the 10% customs duty on import of gold bars, which has spurred smuggling of gold, leading to a decline in official imports and reported numbers.

GOLD technical analysis



Gold has been trading sideways for five trading days in a row above the 38.2% retracement level at around 1250.00. With the cautiousness on the fundamental side, and the fact that the gold market has entered the oversold zone, sellers have restrained the downward push and are simply waiting it out. If the minutes are not in favor of the precious metal, gold can breach the 38.2% level and collapse to as low as the 50.0% level.

Trade suggestion

Sell Stop at 1249.50, Stop loss at 1265.00, Take profit at 1235.00

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Re: Market Outlook by Capital Street FX

PostPosted: Thu Oct 13, 2016 5:54 pm
by CSFX.Support
Cost Cutting Helps CSX Third-Quarter Results beat Expectations – Sells Suggested

Shares of CSX Corporation rose more than 3% in after hours trading on Wednesday after the transportation services company reported better-than-expected quarterly earnings after the closing bell.

CSX’s third-quarter earnings fell to $455 million, or 48 cents a share, from $507 million, or 52 cents a share, a year earlier. Net profit for the railroad operator was hurt by the drop in revenue and freight volumes. During the three-month period through September, CSX’s revenue shrank 8% to $2.71 billion compared to the same quarter one year ago. Still, the results came in above market expectations of 45 cents EPS, on revenue of $2.69 billion.

The U.S’s third largest railroad transportation company observed a total decline of 8% in shipping volume across most of its goods categories including metals, equipment business and coal. Among decliners, coal shipments posted the worst performance, slipping 21% as a result of oversupply in the world market and a stronger U.S. dollar that made U.S. exports more expensive overseas.

Additionally, plunging fuel prices and increasing use of natural gas that is being encouraged by the government are putting pressure on coal demand and coal shipments. As natural gas produces less carbon dioxide than coal when burned, the U.S government has planned to get off coal used by power plants, to reduce emissions.

However, the Florida-based company’s third quarter’s data still bettered forecasts thanks to strong cost performance and productivity measures. The bottom line was helped by 6.8% cut in expenses, driven by $112 million of efficiency gains and $53 million of volume-related cost reductions.


Shares of CSX Corp have been on a decline after reaching 15-month highs at around 31.28. In general, the shares are trading above the 20-day and 50-day MAs and the market is still in favor of buyers, as indicated by the RSI chart. Share prices are expected to reverse today, partly due to fundamental factors, but also because the price action has neared the short-term DMA20.

CSX Trade suggestion
Sell Stop at 31.00, Take profit at 30.50, Stop loss at 30.00

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Re: Market Outlook by Capital Street FX

PostPosted: Thu Oct 13, 2016 6:04 pm
by CSFX.Support
Natural Gas Screams to Record Highs On Smaller-than-expected Rise in U.S. Stocks– Buy Call Options

Natural gas prices turned sharply higher Thursday following a two-day slide. The commodity hit the highest since December 2014 at $3.347 per million British thermal units after the U.S. Energy Information Administration reported that natural gas supplies rose 79 billion cubic feet for the week ending Oct.7th.

The increase in stocks was below analyst estimates that had called for a rise of 87 billion cubic feet.

According to the report, total stocks now stand at 3.759 trillion cubic feet, up 56 billion cubic feet from a year ago and 192 billion cubic feet above the five-year average.

Trade suggestion

Buy Stop at 3.350, Take profit at 3.380, Stop loss at 3.320

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Re: Market Outlook by Capital Street FX

PostPosted: Fri Oct 14, 2016 1:39 pm
by CSFX.Support
NZD/USD signal by Capital Street FX

From GMT 07:05 14/10/2016
Till GMT 21:00 14/10/2016

Sell at 0.70900
Take profit at 0.70400
Stop loss at 0.71300

Re: Market Outlook by Capital Street FX

PostPosted: Fri Oct 14, 2016 1:51 pm
by CSFX.Support
Copper Plunges As Demand Falls, Risk Of Supply Glut Rises – Short Positions Encouraged

Copper has been slumped for the most part of the week, collapsing nearly 4% after reaching intra-week high at $2.2018 per pound on Monday. The commodity market is forecast to witness more decline as it is going to confront with significant supply glut and dropping demand in the coming months.

Copper witnessed the biggest one-day loss on Thursday since June 07th, after the Chinese General Administration Customs reported worse-than-expected exports and imports data for September. According to the report, China’ exports diminished by 10% in September from a year earlier while imports also witnessed a decline of 1.9%, which spurred concerns over weak demand for goods both in China and many other parts of the world such as the U.S., Europe and much of Asia.

Demand for copper imports of China was also reported to decelerate last month to the lowest in more than a year. China’s imports of the red medal fell by 26 percent from a year ago to 340,000 tons in September, which is the lowest since at least August 2015. On a monthly basis, imports to the world’s leading copper consumer dropped by 2.9%.

On the supply side, commodity analysts at Goldman Sachs said that considering the rise of supply, copper prices would be under downward pressure over the next three to six months.

In a separate report by BMI Research, the research firm forecast Iran’s mining industry will resurge after years of Western sanctions. According to BMI, foreign investment will help accelerate Iran’s mining sector as the Middle-Eastern nation possesses vast underdeveloped reserves but is still looking for modernization and new technology.

Iran’s copper output is expected to outperform in the coming years and reach the growth rate of 13% each year top 500,000 tons by the end of the decade.


In a week, copper has breached through two important Fibonacci levels - the 38.2% and 50.0% , to fall as low as 2.1120. The price action also has also crossed below both the long-term DMA50 and short-term DMA20 from above. The market is under pressure from two MAs placed overhead, and the overwhelming strength of sellers in the market. Copper prices are approaching the 61.8% handle at 2.0860. The RSI is also heading towards bearish territory, providing further confirmation for the down-move.

Trade suggestion
Sell Stop at 2.1120, Take profit at 2.0860, Stop loss at 2.1400

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Re: Market Outlook by Capital Street FX

PostPosted: Fri Oct 14, 2016 1:55 pm
by CSFX.Support
Image
Daily Report on October 14, 2016

Asian stocks bounced back on Friday, but were still heading for the biggest weekly decline in almost a month. Shares erased some losses from the start of this week, thanks to the rally in oil prices that boosted energy sector stocks, and stronger-than-expected Chinese inflation data which helped ease concerns about the health of world's second-biggest economy.

After triggering chaos in global stock markets by reporting a steep drop in exports and imports in data released yesterday, China once again set the tone for the markets, but in the opposite direction. Chinese producer prices unexpectedly rose in September for the first time in nearly five years, thanks to stronger commodity prices.

Meanwhile, China’s consumer inflation also beat expectations, accelerating more than expected to 1.9 percent in September compared to the same month last year. The price rise was mainly due to higher food prices. On a yearly basis, Chinese food prices added 3.2 percent in September, topping a 1.3 percent gain (year-on-year) in August.

Oil turned higher even though the U.S. Energy Information Administration on Thursday reported that U.S. crude stocks rose for the first time in six weeks. Crude stockpiles in the U.S swelled by 4.9 million barrels in the week to Oct. 7th .Total inventories rose to 474 million barrels, but distillates, which include diesel and heating oil, dropped by 3.7 million barrels and gasoline fell by 1.9 million barrels.

Also in the U.S, filings for unemployment benefits were reported to be at a four-decade low over the past two weeks. According to the weekly report by the U.S Department of Labor, jobless claims were 246,000 in the week ended October 8th, remaining below 300,000 for 84 straight weeks and indicating a healthy labor market.



Technicals

EURCHF



Fig: EURCHF H4 Technical chart

EURCHF pulled back from two-week lows at 1.08687 on Thursday but failed to surpass the 50.0% retracement level at 1.09093. The currency pair crawled back to the downside as it is still under the downward pressure of the two moving averages placed above the price action. Down moves are being supported by indicators. As can be observed from indicator windows, while stochastic lines are pointing downwards, the RSI index has also retreated to as low as 38.42.

Trade suggestion

Sell Stop at 1.08900, take profit at 1.08520, stop loss at 1.09100



EURUSD



Fig: EURUSD H4 Technical chart

EURUSD broke out of the recent trading range on Tuesday and fell below the 50.0% retracement at 1.10573 on the same day. The pair plummeted to as low as 1.09847 yesterday, before buyers stepped in and liberated it from the oversold zone. However, a brief correction was not enough to support the pair back above the 50.0% level again. In the event of a continual downtrend, the pair may find support at the 61.8% handle.

Trade suggestion

Sell Stop at 1.10200, take profit at 1.09800, stop loss at 1.10600



AUDUSD



Fig: AUDUSD H4 Technical chart

We have seen a strong rally in the Aussie that lifted the market from the 38.2 level to near the 23.6% level. Nonetheless, those rapid up moves also sent AUDUSD into the overbought territory and prompted bears to jump in and push the pair down back below the long-term MA50. The %K line has reversed lower to penetrate the %D line from north to south, but we may need to wait for a confirmation from the RSI index which has reached but not surpassed the 50 line yet.

Trade suggestion

Sell Stop at 0.75650, take profit at 0.75250, stop loss at 0.76000



SILVER



Fig: SILVER H4 Technical chart

Silver has been trading sideways to lower above the 50.0% Fibonacci level since the start of this week. The metal has consistently been pressurized by the short-term MA20 placed above the price action. However, bears have failed to make a breakout below the 50.0% retracement level at 17.416. With U.S data coming out later today, the silver market is anticipated to escape out of the thin trading range it has been in recently. Better-than-expected numbers may push silver to retest last-week's lows at 17.090

Trade suggestion

Sell Stop at 17.390, take profit at 17.090, stop loss at 17.500



WTI



Fig: WTI H4 Technical chart

U.S crude prices have still remained within an overall uptrend, after having suffered losses earlier this week. Having bounced back from the lower band of the Bollinger range, the price action has moved towards the middle band and has just crossed over the middle band (which is also the 20-period MA20). WTI is expected to keep moving upwards since the market continues to enjoy bullish momentum, as indicated by the RSI chart. The upside may be contained by the 0.0% level which is very close to the upper band of the Bollinger range.

Trade suggestion

Buy Stop at 50.85, take profit at 51.55, stop loss at 50.30



FTSE 100



Fig: FTSE 100 H4 Technical chart

U.K’s FTSE 100 index surged above 7000.00 again following a drop below this level yesterday. The index extended Thursday’s gains and looks set to trade above the short-term MA20 after crossing over the long-term MA 50 from below, on Thursday. As can be observed from the stochastic chart, the %K line is moving far ahead of the %D line, suggesting further upside moves.

Trade suggestion

Buy Stop at 7020.00, take profit at 7075.00, stop loss at 6975.00

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Re: Market Outlook by Capital Street FX

PostPosted: Mon Oct 17, 2016 6:04 pm
by CSFX.Support
Bank Of America Results Beat Estimates -Trading Revenue, Cost Cutting Support – Buyers Rush In

Bank of America Corp is the fourth bank to report third-quarter earnings results after a trio of U.S lenders had surprised markets with better-than-expected data. Mingling with the positive tone of its rivals, Bank of America reported pretax profit that was at its highest in a decade.

Thanks to rising bond trading and Chief Executive Brian Moynihan’s cost-cutting campaign, the second-largest U.S. bank by assets was paid off with first profit increase in three quarters. In the three-month period through September, the bank generated a profit of $4.96 billion, or 41 cents a share, up from $4.62 billion, or 38 cents a share, in the same period of 2015.

Furthermore, revenue added 3% to $21.64 billion, beating the $20.97 billion expected by analysts. Meanwhile, expenses declined 3.3% to $13.48 billion, from $13.94 billion a year ago. Mr. Moynihan promised to continue to cut annual expenses by $5 billion by 2018.

Bank of America Trade suggestion
Buy Stop at 16.05, Stop loss at 15.90, Take profit at 16.20

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Re: Market Outlook by Capital Street FX

PostPosted: Mon Oct 17, 2016 6:31 pm
by CSFX.Support
“Phony Accounts” Investigations Haunt Wells Fargo– Short Positions Suggested

Shares of Wells Fargo and Co. closed in the red on Friday, even after the bank reported better-than-expected quarterly earnings. The plunge in the share price was due to concerns over reports related to the creation of about two million accounts by the company without customers’ knowledge.

On Friday, Wells Fargo reported third-quarter earnings of $5.64 billion, or $1.03 a share, down from $5.8 billion, or $1.05 a share in the same period of 2015. Profit recorded in the last quarter was about 2% lower than that of last year, as a low-interest-rate environment dented the bank’s revenue from lending operations.

Average deposits in the retail part of the San Francisco-based bank inched up 0.6% in the third quarter from $708 billion in the second quarter. The number is supposed to not completely reflect the effects of the scandal, which broke in mid-September (two weeks before the quarter ended).

However, Wells Fargo may have felt some heat from the scandal when the number of consumer checking account openings dropped 25% in September from a year earlier and 30% from August. Credit card applications and mortgage referrals from retail banking also fell sharply in September. The fourth-quarter earnings results are expected to give a better read on the damage.

Crisis has engulfed Wells Fargo – the third largest US bank by assets- since last month, when regulators fined the bank $185 million for creating approximately two million bank and credit-card accounts without customers’ consent, in order to meet high sales goals. Nonetheless, Wells Fargo will still have to face a number of ongoing investigations by regulators, as well as private lawsuits.

To help recover from the scandal, the bank has announced a series of changes including eliminating sales goals for its employees and planning to shrink its network of about 6,100 branches to cut operational costs. Still, most analysts have cut profit forecasts for Wells Fargo’s net income for 2017 to around $20.8 billion, down $300 million compared to the average estimate on September 07th, according to Thomson Reuters data.

The state of Ohio is the latest name joining a growing list of municipalities to suspend business relationships with Wells Fargo in the wake of the scandal. With other states and local municipalities, including California, Illinois, and Chicago, Ohio will ban Wells Fargo from bidding for bond underwriting and other types of business.

Additionally, the states of Massachusetts and Oregon, as well as the city of New York, have said they would press for reforms at the bank, while awaiting results of the investigations, and also review their business relationship with the company.

Shares of Wells Fargo finished lower in every trading session in the last week, sending the price action back below the short-term MA20. We witnessed a four-day corrective bounce, starting on October 04th after the shares fell as low as 43.55, as sellers had to buy back shares and book profits. The last two candles with long lower shadows indicate sellers’ profit taking ahead of the weekend, therefore, the downside may extend further this week as there is still room for selling, with the price action under pressure from the MA’s placed above the price action and the deteriorating RSI index.

Wells Fargo Trade suggestion
Sell Stop at 44.70, Take profit at 43.55, Stop loss at 45.30

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Re: Market Outlook by Capital Street FX

PostPosted: Tue Oct 18, 2016 5:48 pm
by CSFX.Support
IBM Earnings Continue to Fall – Growth Potential In New Businesses Encouraging – Buyers May Benefit

Shares of International Business Machines Corp. (IBM) dropped 3.04% to $150.07 per share in extended-hours trading on Monday after the company reported overall revenue that fell for the 18th consecutive quarter.

IBM earned $2.85 billion, or $2.98 a share, in the third quarter, compared with $2.95 billion in the same period last year. Excluding charges, IBM reported earnings of $3.29 a share in the quarter ending September 2016, topping economists’ forecast of $3.23 a share. IBM’s revenue came in at $19.2 billion, which was also above expectations. However revenue remained flat compared to the year-ago quarter. The company retained its 2016 projection of adjusted earnings of at least $13.50 a share.

Even after its shares reversed lower, having ticked up 0.2% in the regular trading day, outlook for the New York-based technology seems promising with some growth in newer businesses such as cloud computing and artificial intelligence. Cloud revenue grew 2.4% to $8.75 billion during the quarter.

IBM Trade suggestion
Buy Limit at 151.50, take profit at 153.00, stop loss at 150.00

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Re: Market Outlook by Capital Street FX

PostPosted: Tue Oct 18, 2016 5:58 pm
by CSFX.Support
DAX Soars With Commodity Prices. Can the Index Breach The 10700.00 Handle?

European stocks traded higher on Tuesday, with gains in commodity producers, banks and optimism over easy monetary policy in the Euro Zone helped shares rebound from losses suffered on Monday. The DAX30 index has added 1.24% so far to 10,633.85.

A soft U.S dollar helped lift oil and metal prices, which subsequently pushed up share prices of German energy companies. Shares of RWE – Germany’s second-largest utility – topped the market, soaring more than 3% after it reported a 10% increase in profits for the first half of 2016. The company has benefitted from the restructuring of its UK business which had been started in March. The firm said the program will take around two years to complete and will cost about 2,400 jobs from its 11,500-strong workforce.

RWE reported that its net income in the first half of this year reached €598 million ($659 million), and reiterated its earnings forecast for the full year of between €500 million and €700 million.

RWE’s rival, energy supplier EON has also had a nice performance today. Stocks of EON rose by 1.95% thus far, remaining one of the biggest gainers in the market, fueled by rising oil prices.

Mohammad Barkindo, Secretary General of the OPEC on Tuesday reinforced the participation of Russia in the highly anticipated plan to limit global oil production. Speaking at the sidelines of the “Oil & Money” conference in London, Barkindo said that Russia has been very active in trying to stabilize the oil market and that he will meet with Russia’s Energy Minister Alexander Novak next Monday to discuss the details of the output cut plan.

Out of the 30 companies in the DAX 30 index, only shares of Continental AG were trading lower today. The Hanover-based company cut its 2016 profit forecast, citing warranty costs and antitrust-fine provisions as factors that will dent profits. Higher research and development spending, as well as costs from disruptions at a supplier in Japan because of an earthquake in August will also contribute to a 480 million-euro ($529 million) fall in operating profit.

The DAX30 not only created a big gap up on the opening today, but also took off to a one-week high at around 10656.26. The strength of the recent rally can be seen on the price chart with recent candles showing almost no upper shadows. The price action has solidly crossed over both MA’s from below, with both moving averages placed below the price action and the RSI above 50. The DAX may come up against stiff resistance at the 10700.00 threshold.

Trade suggestion

Buy Stop at 10660.00, Take profit at 10700.00, Stop loss at 10600.00

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