Midday Market Outlook 26 Jan

csfx-market-outlook

Major Chinese Stock Indices slumped more than 6% today. The largest equity index of China – the CSI300 index fell 6.02% , closing at 2940.51, which is a new 14 month low. So far the Chinese Stock market has had a drawdown of 22% this year.

Kuwait’s OPEC Governor Nawal al-Fuzaia told an energy forum in Kuwait on Tuesday that the Organization of the Petroleum Exporting Countries is ready to cooperate with others to stabilize the oil market, according to media reports. “OPEC is willing to cooperate with producers outside the group if they show that they are serious about cooperating with OPEC. Non-OPEC producers keep on making statements that they are willing to cooperate, but the reality is different,” she said. She forecast oil price  could wobble around the $40-$60 a barrel level until 2020.

Bank Of England Governor Mark Carney reiterated comments from last week indicating that any hike in interest rates is a far way off and conditions are not yet in place for a hike anytime soon, and offered no indication of any potential timelines or time frame for interest rates to start tightening.

Technicals

EURUSD

EURUSD made an abortive attempt to climb higher today. It made a high @1.0873 but was rejected by the confluence of moving averages SMA50 and SMA200 on the H4 chart. Currently, it is trading @1.0834 price level dropping 39 pips from the high. It has tumbled by 0.15% today so far.

1

On the hourly chart, EURUSD current price level is below SMA200 but Still above SMA 50 and stochastic is gradually turning down. The bearish momentum is increasing after facing a rejection from the SMA200 on the H1 chart. Intraday bias is bearish as the price has broken through the upward diagonal support line, that was underlining the recent upward move.

Trade Suggestion:

Sell below 1.0825 with Stop Loss @1.0870 and Take Profit @1.0785.

GBPUSD

GBPUSD has dropped 0.40% so far and fallen back below the 1.4200 level after starting today @1.4246 level. The fall has been quite noisy as it the fall is being accompanied by frequent rebounds in the downward move.

2

On the H1 chart the price is below SMA50 and SMA200 and also the Stochastic has turned down. It is rebounding right now after creating a low @1.4172. It may test 1.4240 level again as there is lack of momentum towards the downside. As long as price is below 1.4240, the bearish bias will prevail so intraday bias is bearish.

Trade Suggestion:

Sell  below 1.4220 with a Stop Loss @1.4255 and Take Profit @1.4150.

USDJPY

USDJPY has pulled back strongly in European session after having a sharp fall in Asian session . Currently it is up by 0.04% .

3

On the hourly chart, the price of USDJPY is above the SMA200 but coincided with SMA50 which is acting as resistance right now. The intraday bias is bullish as price has broken through the downward sloping diagonal with strong bullish momentum on the hourly chart. It is expected to see further upward moves in the US session.

Trade Suggestion:

Buy above 118.35 with a Stop Loss @117.90 and Take Profit @118.75.

Crude Oil

Crude Oil had a strong sell off yesterday, falling  about 7.02% . Today it has started rebounding strongly in the European session after making a low @29.23. So far it is up by 0.71% today.

4

Intraday bias in Crude Oil is neutral as it is  a market in turmoil, with  huge volatility. On the H1 chart current price level of Oil is above the SMA200 but still below SMA50 which may act as immediate resistance.

It got support @29.23 today and broke above 30.20 level which may act as support right now.  A sustained move above 31.60 would open up the way towards 34.00 level. But if it falls below 30.00 level the bears will prevail again.

Trade Suggestion:

Sell below 29.90 with a Stop Loss @30.30 and Take Profit @29.40. Buy above 31.70 with a Stop Loss @30.10 and Take Profit @33.30.

Gold

XAUUSD is in a strong uptrend in short term against its long term major bearish market as many  investors are driven towards a safe haven in bullion as global equity markets slump . It has gained 0.67% today so far. Earlier today it breached the 1113 level , the high of 8th January,2016.

5

On the H1 chart, XAUUSD has formed a well-established upward sloping channel. Currently, the price is above SMA50 and SMA200 and stochastic is also indicating strong bullish momentum on the daily chart. If the support level of 1109.00 holds, it might drive towards 1120.00 level.

Trade Suggestion:

Buy above 1113.50 with a Stop loss @1108.80 and Take Profit @1119.50.

Silver

XAGUSD is up 1.13% so far today, breaching the top of the large consolidation it has had in the last one month.

6

On the H4 chart , flat SMA50 is slowly curving towards the upside and crossing over the flat SMA200 moving averages as the market has been in a strong rally in last two weeks. Stochastic is also showing strong bullish momentum right now. If the price can sustain above 14.40 level it would open up the way towards the high of 7th December, 2015 @14.62.

Trade Suggestion:

Buy above 14.45 with a Stop Loss @14.35 and Take Profit @14.58.

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