China tries to stabilize the Yuan

Lately, the decision by the People’s Republic Bank of China has been moving the markets in one way and another. Today the Chinese central bank has allowed the Yuan to rally again after it was known that certain government Chinese banks had been buying the Yuan aggressively. On the other hand, this has caused emerging markets and their currencies to have mixed reactions. In Latin America, most indices closed down. In Brazil, Chile, Argentina and Colombia, stock markets closed to the down side, while most of its currencies came back down versus the Dollar, but the Mexican markets closed to the upside. It is possible that the decisions by China will continue affecting these markets and that is why most investors are preferring to keep their capital in safe haven instruments.

Light crude oil is back to 12 year lows

Doubts about the Chinese economy continue hurting the prices of oil and the WTI comes back down to the 32.00 zone. Stochastics are entering the over-sold zone, but due to the fact that the MACD indicator is showing us that the bearish trend is getting stronger, then the price may break below the 32.00 level. If the price breaks below the 32.00 level, then the 31.00 could act as support. In case the price retraces to the upside, the 33.00 could act as resistance.

GBP/USD: Another pair with a strong bearish trend

The Pound continues losing ground versus the Dollar, even though the job’s numbers from the United States came out mixed. The amount of new jobs created in December in the US came out way better than expected, the unemployment rate stayed unchanged at 5%, and the average hourly wages also stayed unchanged. This caused the Dollar to rally initially, but then it dropped again, except versus the Pound. This shows that the Pound is having some internal difficulties that prevents it from heading higher. The last low on the GBP/USD has been the 1.4500 level, if it continues dropping, the pair may reach the 1.4400 level. In case of a bullish retracement, the 1.4700 level could act as resistance.

New amazing webinars to start 2016

The New Year has brought us new events provided by ActivTrades, which can be attended by anyone who would like to expand his or her knowledge of the financial markets free of charge. Today, January 7^th, Rishi Patel will be conducting a Webinar on how to scale in and out of a position. Next week, on the 14^th of January, Thiru Nagappan, another great instructor and professional trader will be explaining contrarian trading strategies. On the 21^st of January, Sabeer Peerbaccus will be explaining a basic concept of support and resistance, but at the same time it is a powerful tool that will stay with us for the rest of our trading career. To register for these events, please visit the following link:

https://www.activtrades.co.uk/index.aspx?page=events_webinar

11 year lows for light crude oil

Light crude oil or WTI which trades in the United States has reached an 11 year low and touches the 34 Dollars per barrel zone. Since October of last year, oil made a pullback to the 50.00 level, but since then it has been falling with a well-defined downtrend. Due to the fact that the over-production of oil is still in place and demand does not want to rise, it is likely that oil will keep falling in the near future. On the daily chart of the February contract we can see that today after the price broke below the 35.00 level, the bearish momentum accelerated and reaches the 34.00 level. Oil may find some support around the 34.00 level, but if it continues falling it may reach the 33.00. Some analyst are even forecasting the price of oil to fall to 20 Dollars a barrel if the underlying conditions do not change.

The USD/CAD returns to its bullish trend

The USD/CAD has gone back to its bullish trend as oil goes back down. We know that oil and the Canadian Dollar have a positive correlation and that is why when oil drops, the USD/CAD tends to rally. The pair tried to break above the 1.4000 level as we can see on the daily chart, but it stalls around that zone. However, the bullish trend is still in place as shown by the 21 period exponential moving average, yellow line, and it is possible to see a breakout of that level, which could take the pair to the 1.4100 level. To the downside, the 1.3800 could become its most relevant support.

The Yen strengthens on news from China

The Yen strengthened for today versus the Dollar and we can see that the USD/JPY reached a low around the 118.67 level among a rise in risk aversion. The Chinese data came out worse than expected and that has made investors and traders think twice about the Chinese economic contraction, which could have serious consequences on the global economy. The public has rushed into safe haven instruments like the Yen, the Swiss Franc and gold. However, on the daily chart of the USD/JPY we can see that by the end of today’s session, the price tried to correct to the upside. If the price keeps correcting to the upside, then the 120.00 level could act as resistance. To the downside, the 118.67 level or the 118.00 level could act as support.