Daily Market Lookup

• The dollar extended its losses on Friday as major central banks signalled that the era of cheap money was coming to an end in a boon to sterling, the euro and the Canadian dollar, while Asian shares were hit by dismal performances of European and U.S. markets. But global stock market indexes are set for more gains by the end of this year, driven by an economic revival in Europe and bright prospects for much of Asia, a Reuters poll of around 300 financial professionals showed. But the greenback remained lower against other major currencies. Adding to the dollar's weakness against the yen was data showing Japanese core consumer prices rose 0.4 percent in May from a year earlier in its fifth straight month of gains, although inflation remains well below the central bank's 2 percent target. Bank of England Governor Mark Carney surprised many on Wednesday by conceding a rate hike was likely to be needed as the economy came closer to running at full capacity. Two top policymakers at the Bank of Canada also suggested they might tighten monetary policy there as early as July. Despite comments by sources that European Central Bank President Mario Draghi had intended to signal tolerance for a period of weaker inflation, not an imminent policy tightening, the euro on Friday revisited the 13-month high of $1.1445 hit on Thursday. The negative sentiment infected Chinese shares despite surveys showing activity in the country's manufacturing and services sector accelerated in June from the previous month. Manufacturers appeared to enjoy strong external demand, as new orders and production rose at a solid pace.
• The Federal Reserve said on Thursday it would release its semiannual monetary policy report on July 7, five days before Fed Chair Janet Yellen testifies to Congress. Historically, the report on the U.S. economy and central bank policy has been released along with testimony from the Fed chief. In a brief statement, the Fed said the advanced release would allow members of Congress and the public time to review the report before Yellen's appearance. Yellen is scheduled to testify before the House Financial Services Committee at 10 a.m. (1400 GMT) on July 12, the panel said earlier on Thursday. The Fed said a copy of her prepared remarks would be released the same day at 8:30 a.m. The Fed this year increased the pace of its interest rate increases. In addition, it recently announced detailed plans for reducing its holdings of securities accumulated during the financial crisis, an issue of particular interest among some lawmakers.
• Gold prices inched lower, as a flurry of comments from central banks bosses hinting at tapering ultra-loose monetary policy measures, pushed bond yields higher and lessened demand for the precious metal. Global bond yields have ticked higher during the week, after The European Central Bank, Bank of England, and Bank of Canada signaled that measures to tighten monetary policy could be adopted relatively soon. Comments concerning tighter monetary policy measures were expected from the Bank of Canada and the European Central Bank but it was the change in tone from Bank of England governor Mark Carney that caught investors off guard. Bank of England governor Mark Carney, appeared to reverse his recent assertion that there “was no need to raise rates soon”, after he said on Wednesday that “some removal of monetary stimulus is likely to become necessary”. In a rising interest rate environment, investor appetite for gold weakens as the opportunity cost of holding the precious metal increases relative to other interest-bearing assets such as bonds.
• Crude oil futures on Friday were on track for their biggest weekly gain since mid-May, ending five weeks of losses with prices underpinned by a decline in U.S. output. Data indicating a fall in U.S. production bolstered markets this week after crude prices hit a 10-month low last week in the face of a mounting supply glut. U.S. crude output fell 100K bpd to 9.3 mn bpd last week, the steepest weekly fall since July 2016. Meanwhile, the North Sea crude oil market is showing signs of long-lost strength, suggesting that some of the pessimism that has driven down oil futures and created a record bet against a price rise may be unjustified. On Thursday, about 6 million barrels of North Sea Brent crude were being stored on ships, down from four-month highs of as many as 9 million last week, and trading sources said it seemed now refineries were starting to take in more cargoes. Global oil supplies remain ample despite output cuts of 1.8 million bpd by the Organization of the Petroleum Exporting Countries and other producers since January. OPEC has exempted Nigeria and Libya from the curbs, leaving them free to ramp up output following local unrest, with Libyan oil production nearing 1 million bpd.

Gold – XAU

Gold closed down on Thursday and made its intraday high of 1253.01/oz and intraday low of US$1239.66/oz. Gold down by 0.319% at US$1245.10/oz.

Technicals in Focus:

In daily charts, prices are above 200DMA (1239) and breakage below will call for 1234-1224. 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 oversold territory and giving negative crossover to confirm bearish stance for intraday trade.

Trading Strategy: Neutral

Based on the charts and explanations above; sell below 1254-1286 keeping stop loss closing above 1300 and targeting 1246-1240 and 1231-1224. Buy above 1241-1224 with risk below 1224, targeting 1254-1260-1270 and 1278-1286.

Silver - XAG

Silver closed up Thursday on made its intraday high of US$16.88/oz and intraday low of US$16.57/oz. Silver settled by down by 1.132% at US$16.59/oz.

Technicals in Focus:

On daily charts, silver is sustaining below 100DMA (17.47), 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 16.40-15.30 taregting 16.80-17.35 and 18.05-18.30; stop breakage below 15.30. Sell below 16.80-18.30 with stop loss above 18.30; targeting 16.80-16.40 and 16.10-15.65-15.30.

Oil - WTI

Crude Oil on Thursday made an intra‐day high of US$45.43/bl and made an intraday low of US$44.64/bbl and settled down by 0.15% at US$44.79/bbl on session close.

Technicals in Focus:

On daily charts, oil is sustaining below its 200DMA i.e. 49.77 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 neutral region and giving positive crossover for confirmation of bullish 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 44.45-47.00 with stop loss at 47.00; targeting 42.90-42.30-41.50 and 40.90-40.00. Buy above 42.90-40.90 with risk daily closing below 40.90 and targeting 44.45-45.22 and 46.10-47.00.

EUR/USD

EUR/USD on Thursday made an intraday low of US$1.1373/EUR and made an intraday high of US$1.1444/EUR and settled the day up by 0.553% at US$1.1439/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 buy crossovers to signal for bullish 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 1.1465-1.1700 targeting 1.1420-1.1370-1.1290 and 1.1200-1.1140 with stop-loss at daily closing above 1.1100. Buy above 1.1420-1.1140 with risk below 1.1100 targeting 1.1465-1.1540 and 1.1620-1.1700.

GBP/USD

GBP/USD on Thursday made an intra‐day low of US$1.2922/GBP and made an intraday high of US$1.3014/GBP and settled the day up by 0.626% at US$1.3005/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 1.3100-1.3280 with targets at 1.2990-1.2900-1.2845 and 1.2790-1.2700, breakage above 1.3280 look for further upside with 1.3350 as targets. Buy above 1.2990-1.2700 with stop loss closing below 1.2700 targeting 1.3050-1.3100-1.3160 and 1.3200-1.3280.

USD/JPY

USD/JPY on Thursday made intra‐day low of JPY111.80/USD and made an intraday high of JPY112.92/USD and settled the day down by 0.0979% at JPY112.16/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 buy as it has given positive crossover to confirm bullish stance.

Trading Strategy: Neutral to Buy

Long positions above 112.10-109.50 with targets of 113.00-113.95 and 114.40-115.00 with stop below 109.50. Sell below 113.00-115.00 with risk above 115.00 targeting 112.10-111.60 and 111.05-110.40- 110.00.