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Expectation of Rate Hike in June Heightens

A guest post written by DAR Wong

Currency Market Observations - 23 May 2016

Fundamental Outlook

The U.S. economic data shows recovery and suggests possible rate hike in June. Eurozone increases in current account while British jobless claim slides. U.K. retail sales also jumps and strengthens Pound value.

The U.S. consumer prices rose 0.4 percent in April, highest since May last year and giving an expectation to rate hike in next month. Excluding fresh food and energies, core prices gained 0.2 percent and matches the forecast. Building permits rose 1.12 million and higher than 1.08 million gains in March, boosting some confidence in housing markets. Housing starts also climbed 1.17 million in April.

American jobless claims dropped to 278,000 in the week ended 14 May and lower than 294,000 in previous week, fueling job market recovery for possible imminent rate hike. Manufacturing index in Philadelphia slides...

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Gold and Oil Markets Report – 23 May 2016

A guest post written by DAR Wong and Chong HC

Dollar Index (USDX) climbed higher above 95.00 last week and put lid on Gold and Silver prices. We reckon the Dollar Index will reach 96.00 – 96.40 tops before being countered by selling pressure, hence commodities might lie low till end of May before new buying interest summons in June. WTI Crude has slowed in ascension and capped below USD50.00 per barrel. U.S. FED policymakers make comments again on possible rate hike in June should economy point to growth.

Crude Oil

WTI Crude prices have slowed down in demand but still waiting for momentum to turn into negative zone before selling activity arises. This week, we remain dormant in market by observing the resistance at 50.00 levels to be tested. Short-term range is expected from 46.00 – 50.00 regions while turning down beyond...

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Bank of England Keeps Policy Unchanged

A guest post written by DAR Wong

Currency Market Observations - 16 May 2016

Fundamental Outlook

The U.S. economy contradicts in slower demand for inventories while retail sales rise. Job market tightens as claims increase. China reports higher trade surplus but inflation stagnates. Bank of England remains unchanged in interest rate policy amid holding to asset purchase program.

The U.S. wholesale inventories rose 0.1 percent in March after and higher than revised minus 0.6 percent in February, signaling low demand in markets. Weekly crude inventories ended 7 May was slashed by 3.4 million reserves and spiked up oil prices.

American jobless claims rose to 294,000 in the week ended 7 May and highest in past 12 months, rising concerns of slowdown in job markets. Retail sales rose 1.3 percent at 10-month high after it reversed from minus 0.3 percent decline in March. Core retails sales,...

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Gold and Oil Markets Report – 16 May 2016

A guest post written by DAR Wong and Chong HC

Gold and Silver prices traded in mild bearish sentiment after Dollar firmed up last week. WTI Crude resurges after weekly Crude inventories have been reduced by 3.4 million and support the demand for oil. Global attention is focused on U.K. Brexit in coming June as investor are worried this could trigger a new meltdown if U.K. opts out of European Union. Greece is preparing new spending cut plan for applying a new bailout from IMF in June.

Crude Oil

WTI Crude prices are now resisted at 46.50 regions after it closed with a double-top formation on Friday. This week, we foresee the trend may fall on higher probability with Gold prices since Dollar Index could be recovering. The range might be tight from 42.00 – 46.50 regions but breaking above 46.50 resistance will...

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American Payroll Drops to 3-Month Low

A guest post written by DAR Wong

Currency Market Observations - 09 May 2016

Fundamental Outlook

The U.S. payroll slides unexpectedly amid stronger construction spending. Jobless claims also rise as vacancies shrink. European economy is expected to grow at lower rates. British slows in manufacturing growth and service sectors.

The U.S. Institute of Supply Management reports its manufacturing index grew to 50.8 in April but declined from previous month 51.8 and below forecast. Construction spending hits 8-1/2 year high at 0.3 percent gains in March after it gained at revised 0.1 percent growth in February.

Another separate report from Institute of Supply Management says services index grew at 55.7 in April, tracking a good momentum and highest at 5-month record. However, weekly jobless claims rose to 5-week high at 274,000 in the week ended 30 April.

The U.S. non-farm payroll declined to 160,000 in April...

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Gold and Oil Markets Report – 09 May 2016

A guest post written by DAR Wong and Chong HC

Gold prices fell off the top after it touched briefly above 1300.00 levels last week. American non-farm payroll expectedly slid to 160,000 in April and puts a brake on inflation check. Precious metals recovered mildly after the data release but might fall this week. Crude prices have been trading around 44.00 with buying interest gradually diminishing in market.

Crude Oil

WTI Crude prices have tested the reversal from 46.50 tops while support emerges at 42.00 areas. The EMA200 line coincides with support with strong buying interest for time being. This week, we predict the market will trade in softer sentiment while constricted within this range. Breaking above 46.50 resistances need to abandon all short-view.

Gold

Gold prices may continue to do price correction this week in case of recovering Dollar. We reckon the resistance...

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Japan Refrains from More Stimulus Triggers Disappointment

A guest post written by DAR Wong

Currency Market Observations - 03 May 2016

Fundamental Outlook

The U.S. home market lingers in low demand as orders for durable goods slide. Federal Reserve delivers no immediate necessity to rate hike despite the review might be prone to tightening in June. Bank of Japan refrains from adding new stimulus and causes Yen to rise unexpectedly against Dollar. Brexit issue triggers worries among regional leaders for prolonging the slowdown in global economy.

American new homes sales for March grew 511,000 and lower from revised 519,000 in previous month. The Conference Board of consumer confidence rose to 94.2 and down from 96.1 in March. Another report on core durable goods, excluding transport equipment, receded 0.2 percent in March and lesser than 1.3 percent plunge in previous month.

The U.S. pending homes sales grew 1.4 percent but down from revised 3.4...

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Gold and Oil Markets Report – 03 May 2016

A guest post written by DAR Wong and Chong HC

Gold prices rallied up on Friday after submerging for 2 weeks. Yellow metal closed above 1290.00 for the weekend amid the slide in U.S. Dollar Index (USDX). Bank of Japan refrains from adding more stimulus and pushes Yen to 6-month high against Dollar causing the USD/JPY to drop. Crude prices have traded higher above USD45.00 per barrel while Dow Jones Industrial Average (DJIA) closed 18,000 levels on Friday and might trigger new selling forces in coming week.

Crude Oil

WTI Crude prices have been recovering above USD30.00 per barrel since early March. Despite global supply glut, prices are still climbing while reacting to receding Dollar Index and short-covering activity. Technically, we reckon the range will move from USD40.00 – USD50.00 regions for time being in mixed sentiment. This week may be prone to...

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European Central Bank Defends Policy

A guest post written by DAR Wong

Currency Market Observations - 25 April 2016

Fundamental Outlook

The U.S. new housing sits on low demand while job market grows with lowest claims in 43-year record. European Central Bank holds policy unchanged but reaffirms the recovery plan to be correct despite some disagreement. British retail sales drop amid slow job markets.

The U.S building permits rose 1.09 million for March but lower than revised 1.18 million in previous month. Another separate data on housing starts also indicates 1.09 million after February recorded 1.19 million revised figure.

American existing homes sales grew 5.33 million in March and better than revised 5.03 million in February. Weekly jobless claims fell to 247,000 after seasonally adjusted in the week ended 16 April, lowest in last 43 years. Momentum in job markets is growing despite weak economy.

Another separate report on Philadelphia manufacturing...

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Gold and Oil Markets Report – 25 April 2016

A guest post written by DAR Wong and Chong HC

Gold prices swung last week from USD1227.0 – 1270.0 per troy ounce as Dollar whipsaw. Pound escalated against Dollar after U.S. President visited London and spoke in disfavor for Brexit. Meanwhile, Japanese Yen weakened against Dollar before weekend after central bank expressed intention to start negative rates for lending to commercial banks. Crude prices still stay high despite Saudi Arabia and Russia reiterate they will continue to increase supply.

Crude Oil

WTI Crude prices met strong resistance at 44.00 levels and could not close above here for more than 3 days. Going forward, the fundamentals and technical aspects of market are pointing to a potential down move in prices with strong selling pressure emerging at 45.00 regions. Piercing beneath 40.00 immediate supports will initiate new selling forces in market and probably dive down...

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