Daily Market Lookup

• Asian shares wobbled on Thursday as investors braced for any surprises from the UK election, a European Central Bank policy meeting and congressional testimony from ex-FBI director James Comey who was fired by President Donald Trump last month. Wall Street shares ticked up on Wednesday, despite sharp declines in energy prices, after written testimony from Comey did not add major revelations about an investigation into Russian meddling with last year's U.S. presidential election. The pound gained as much as 4 percent after May called a snap election seven weeks ago, as polls had initially suggested a landslide win for her Conservative party that would give the prime minister a stronger hand in Britain's negotiations on leaving the European Union. Yet traders are cautious given the Brexit shock last year and as her once-commanding lead over the Labour Party and its veteran hard-left leader Jeremy Corbyn has been narrowing through the campaign. Ahead of the UK vote results, the European Central Bank will meet, with a policy announcement due at 1145 GMT, followed by President Mario Draghi's news conference at 1230 GMT. With no policy change expected, market players are focusing on how the central bank may alter its economic assessment and policy guidance in light of a strengthening euro zone economy. ECB policymakers are set to take a more benign view of the economy and will even discuss dropping some of their pledges to ramp up stimulus if needed, sources with direct knowledge of the discussions have told Reuters. The dollar stayed near its seven-month low against a basket of currencies as doubts over Trump's ability to push through his stimulus plans have eroded the greenback's gains made late last year. The BOJ has insisted it has no plans to start tapering any time soon, but many analysts and traders believe the pace of its bond buying appears unsustainable.
• China reported a trade data surplus of $40.81 billion, narrower than the $46.32 billion expected, but wider than the $38.05 billion seen last month with exports up 8.7%, more than the 7.0% gain seen and imports up 14.8%, beating the 8.5% gain seen year-on-year. Earlier, Japan GDP for the first quarter led a slew of data, with quarter-on-quarter figures coming in weaker than expected at a gain of 0.3%, compared to 0.6% seen and the annual pace at 1.0% compared with 2.4% expected. As well, the seasonally adjusted current account came in at a surplus of ¥1.81 trillion, wider than the ¥1.62 trillion forecast. Australia's trade balance came in narrower than expected at A$555 million, compared to an expected at a surplus of A$1.950 billion for April, the data a bit of a lag. Overnight, gold steadied on Wednesday, supported by a drift lower in the dollar, as investors anticipated a flurry of potential risk events that could spur volatility and uncertainty, increasing demand for safe havens.
• The European Central Bank is likely to keep the money taps fully open at its meeting on Thursday as inflation remains below its target despite stronger economic growth in the euro zone. The currency bloc's economy has been on its best run for a decade but ECB President Mario Draghi is yet to be convinced that the recent rebound in inflation is durable because wage growth remains sluggish. Against this backdrop, the ECB is widely expected to keep policy unchanged on Thursday, including its 2.3 trillion euro ($2.59 trillion) bond-buying program and sub-zero interest rates, despite resistance from cash-rich Germany. Sources have told Reuters the ECB is likely to nudge up its growth forecasts but trim its estimates for inflation when it presents its new staff projections for 2017-19. The mixed outlook was seen strengthening the case for keeping the ECB's easy policy in place, including a pledge to cut rates further if necessary to bring inflation back to the central bank's target of just under 2%.
• Crude futures edged up in early Asian trading on Thursday following heavy losses in the previous session after official data showed that U.S. inventories rose for the first time in 10 weeks, reawakening concerns of a supply glut. Many investors are wary ahead of Comey's Senate appearance later in the day for any hints that U.S. President Donald Trump may have been engaged in obstruction of justice - an offense that could lead to impeachment hearings. ECB policymakers are set to take a more benign view of the economy and will even discuss dropping some of their pledges to ramp up stimulus if needed, sources with direct knowledge of the discussions told Reuters. In the U.S., stocks of crude oil and gasoline surprisingly rose last week as refinery runs declined and exports fell, official data showed on Wednesday. Crude inventories rose by 3.3 million barrels in the week ended June 2, compared with expectations for a decline of 3.5 million barrels, the EIA said. It was the first increase in 10 weeks and came as refineries eased off from record processing levels reached a week earlier. U.S. refiners are still producing at a very high rate. The data surprised analysts and undercut a growing view that inventories were finally showing steady progress toward drawing down to seasonal averages.

Gold – XAU

Gold closed down on Wednesday and made its intraday high of 1294.81/oz and intraday low of US$1282.57/oz. Gold down by 0.571% at US$1286.63/oz.

Technicals in Focus:

In daily charts, prices are below 200DMA (1244) and breakage above will call for 1292-1300. MACD is below zero line and histograms are decreasing trend and it will bring downward stance in the upcoming sessions. RSI is approaching neutral region and more upside is expected before it touched overbought region. Stochastic Oscillator is in overbought territory and giving positive crossover to confirm bearish stance for intraday trade.

Trading Strategy: Neutral

Based on the charts and explanations above; sell below 1294-1322 keeping stop loss closing above 1321 and targeting 1286-1276 and 1270-1260. Buy above 1286-1260 with risk below 1260, targeting 1294-1300-1307 and 1314-1322.

Silver - XAG

Silver closed up Wednesday on made its intraday high of US$17.71/oz and intraday low of US$17.49/oz. Silver settled by up by 0.678% at US$17.56/oz.

Technicals in Focus:

On daily charts, silver is sustaining below 100DMA (17.44), breakage above will lead to 17.80-18.00. MACD is above zero line and histograms are increasing trend and it will bring bullish stance in the upcoming sessions. RSI is in oversold region, indicating buy signal for now. The Stochastic Oscillator is in overbought region and giving positive crossover to show upside move for the intraday trade.

Trading Strategy: Neutral

Based on the charts and explanations above, buy above 17.20-15.65 targeting 17.70-18.05 and 18.30-18.60; stop breakage below 15.00. Sell below 17.70-18.60 with stop loss above 18.60; targeting 17.20-16.90-16.30 and 16.10-15.65.

Oil - WTI

Crude Oil on Wednesday made an intra‐day high of US$48.20/bl and made an intraday low of US$45.62/bbl and settled down by 4.52% at US$45.78/bbl on session close.

Technicals in Focus:

On daily charts, oil is sustaining below its 200DMA i.e. 49.76 which is a major resistance and breakage above will call for 50.30-51.00. MACD is below zero line and histograms are in decreasing mode will bring bearish stance in the upcoming sessions. The Stochastic Oscillator is in oversold region and giving negative crossover for confirmation of bearish stance; while the RSI is in oversold region and more downside can be expected.

Trading Strategy: Neutral

Based on the charts and explanations above; sell below 46.95-49.00 with stop loss at 49.00; targeting 46.00-45.20 and 44.50-43.90. Buy above 46.00-43.90 with risk daily closing below 43.90 and targeting 46.95-47.50 and 48.40-49.00-50.10.

EUR/USD

EUR/USD on Wednesday made an intraday low of US$1.1203/EUR and made an intraday high of US$1.1281/EUR and settled the day down by 0.186% at US$1.1255/EUR on session close.

Technicals in Focus:

On daily charts, prices are sustaining above 50DMA (1.0877), which become immediate support level, break below will target 1.0626-1.0600. MACD is below zero line but histograms are increasing mode which will bring bullish view. Stochastic is in oversold territory and giving sell crossovers to signal for bearish outlook for intraday. 14D RSI is currently in neutral region and giving upwards directions to consider buy.

Trading Strategy: Neutral to Sell

Based on the charts and explanations above; sell below 1.1290-1.1425 targeting 1.1250-1.1200 and 1.1100-1.1054 with stop-loss at daily closing above 1.1425. Buy above 1.1250-1.1100 with risk below 1.1100 targeting 1.1290-1.1365 and 1.1425-1.1460.

GBP/USD

GBP/USD on Wednesday made an intra‐day low of US$1.2886/GBP and made an intraday high of US$1.2968/GBP and settled the day up by 0.364% at US$1.2957/GBP on session close.

Technicals in Focus:

On daily charts, prices are sustaining above 200DMA (1.2616) is become major support level. 14-D RSI is currently in neutral region and direction is difficult to predict on RSI bases. The Stochastic Oscillator is in overbought territory and giving positive crossover to confirm bullish stance. MACD is below zero line and histograms are decreasing lead to downward movement.

Trading Strategy: Neutral to Sell

Based on the charts and explanations above; short positions below 1.2950-1.3100 with targets at 1.2900-1.2845 and 1.2790-1.2720, breakage above 1.3100 look for further upside with 1.3150 as targets. Buy above 1.2900-1.2720 with stop loss closing below 1.2700 targeting 1.2950-1.3015 and 1.3050-1.3100.

USD/JPY

USD/JPY on Wednesday made intra‐day low of JPY109.10/USD and made an intraday high of JPY109.88/USD and settled the day up by 0.265% at JPY109.80/USD.

Technicals in Focus:

In daily charts, JPY is sustaining above 200DMA (108.90), which is major support on the daily chart. 14-D RSI is currently is approaching oversold region. MACD is above zero line but histograms are in decreasing mode which might lead to downward movement. The Stochastic Oscillator is approaching overbought territory and signaling to sell as it has given negative crossover to confirm bearish stance.

Trading Strategy: Neutral to Buy

Long positions above 109.50-108.00 with targets of 111.00-111.40 and 110.00-110.40 and 111.10-111.60 and 112.00-112.60 with stop below 108.00. Sell below 111.00-112.00 with risk above 110.200 targeting 109.50-109.00 and 108.55-108.00.