Daily Market Lookup

• Asian shares gained on Friday as technology shares were boosted by upbeat earnings from U.S. hi-tech giants while the euro hovered near three-month low against the dollar after the European Central Bank extended its stimulus. As third-quarter earnings season nears the half-way mark, 74 percent of U.S. companies have topped expectations, above the 72 percent beat rate for the past four quarters. The U.S. House of Representatives helped pave the way on Thursday for deep tax cuts sought by President Donald Trump, passing a budget blueprint for fiscal 2018 that will enable the tax legislation to win congressional approval without any Democratic votes. Although the ECB halved the size of its bond purchase to 30 billion euro per month from January, it also promised years of stimulus and even left the door open to backtracking.
• The dollar stood tall on Friday, on track for weekly gains, while the euro slumped to three-month lows after the European Central Bank extended its bond purchases and reduced the chances that it would hike interest rates in 2018. The ECB prolonged its bond buying programme by nine months to September 2018, and left the door open to keep buying after that. It said it would begin paring its monthly purchases by half to 30 billion euros (26.58 billion pounds) starting in January ECB chief Mario Draghi said “an ample degree of monetary stimulus remains necessary”, as inflation has yet to show signs of a sustained upward trend. Also underpinning the dollar, the U.S. House of Representatives voted on Thursday to clear a procedural path forward for a Republican tax bill. Investor attention remains on candidates to head the U.S. Federal Reserve when current chief Janet Yellen’s term expires in February. Trump’s search for the next central bank chair has come down to Fed Governor Jerome Powell and Stanford University economist John Taylor, Politico on Thursday cited one source as saying, while another counselled caution. But a White House official told Reuters that no final decision has been made. Trump is expected to announce his candidate before his upcoming trip to Asia in early November. Japan’s core consumer prices rose 0.7 percent in September from a year earlier to mark a ninth straight rising month, offering the central bank some hope that economic recovery is helping to drive inflation towards its 2 percent target. The data will be among factors the Bank of Japan will scrutinise when it updates its long-term growth and price projections at next week’s rate review.
• Gold prices fell in Asia on Friday as the dollar showed continued gains and demand for safe-haven assets is on the wane for now. Overnight, gold prices fell on Thursday after the dollar hit three-month highs following a slump in euro as the European Central Bank pared its bond purchases while extending its monetary stimulus programme for a period of nine-months. The European Central Bank announced its intention to rein in monetary stimulus, reducing its monthly purchases of bonds to €30 billion while extending its bond purchasing programme for a period of nine months through September 2018. Although the move was widely expected, the euro came under pressure, lifting the dollar to highs, as investors weighed ECB president Mario Draghi’s comments indicating that the central bank’s bond buying programme is “open ended”, leaving the door open to a prolonged period of monetary stimulus beyond September 2018. Also weighing on gold was a duo of mixed economic reports suggesting that U.S. economic growth is on track to deliver a solid quarter of gains ahead of U.S. GDP data due Friday. Weakness in the housing sector continued as the National Association of Realtors’ pending home sales was flat in September, missing expectation of a 0.2% rise. The U.S. Department of Labor reported Thursday United States Initial Jobless Claims increased 10,000 to a seasonally adjusted 233,000 for the week ended Oct. 21, beating forecasts of a 12,000 increase. Oil prices inched up in early Asian trading on Friday, with Brent continuing to hover near its highest in 27 months, buoyed by comments from Saudi Arabia’s Crown Prince backing the extension of OPEC-led output cuts. Saudi Arabia’s Crown Prince Mohammad bin Salman told Reuters on Thursday that the kingdom would support the extending the output cut deal in a bid to stabilize oil demand and supply. The OPEC and some non-OPEC producers including Russia have pledged to curb their production by around 1.8 million bpd until the end of March to drain a global supply glut. OPEC will meet on Nov.30 in Vienna. Oil prices have hovered around their highest levels of the year in recent weeks amid growing signs of a tightening market including talks over longer OPEC-led output cut deal and geopolitical risks in Iraq and Iran. Although the rising likelihood that OPEC will extend its output cuts raises expectations for a balanced market, U.S. crude production remains an issue for OPEC as it strives to clear a global overhang. U.S. crude production rose by 1.1 million barrels per day to 9.5 million bpd in the week ended Oct.20, according to U.S EIA data.

Gold – XAU

Gold on Friday made its intraday high of US$1273.97/oz and low of US$1263.57/oz. Gold was up by 0.542% at US$1273.86/oz.

Technicals in Focus:

In daily charts, prices are below 100DMA (1275) and breakage above will call for 1312-1321. MACD is below zero line and histograms are decreasing trend and it will bring upward stance in the upcoming sessions. RSI is in oversold region and more downside is expected before it gets stretched. 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 1275-1300 keeping stop loss closing above 1300 and targeting 1266-1260-1251 and 1244-1235. Buy above 1260-1235 with risk below 1235, targeting 1273-1279-1288 and 1300-1311.

Silver - XAG

Silver on Friday made its intraday high of US$16.83/oz and low of US$16.59/oz. Silver settled up by 0.417% at US$16.83/oz.

Technicals in Focus:

On daily charts, silver is sustaining above 200DMA (17.16), breakage below will lead to 16.70-16.35. 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 oversold 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 16.70-15.00 targeting 17.10-17.50-17.70 and 18.00-18.60; stop breakage below 15.00. Sell below 17.10-19.00 with stop loss above 19.00; targeting 16.80-16.50 and 16.00-15.60.

Oil - WTI

Crude Oil on Monday made an intra‐day high of US$54.17/bbl, intraday low of US$52.23/bbl and settled up by 2.576% to close at US$54.15/bbl.

Technicals in Focus:

On daily charts, oil is sustaining below its 200DMA i.e. 49.60 which is a major resistance and breakage above will call for 50.30-51.00. MACD is above zero line and histograms are in increasing mode will bring bearish stance in the upcoming sessions. The Stochastic Oscillator is in overbought 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 54.60-56.30 with stop loss at 56.30; targeting and 53.75-53.00 and 52.00-51.50-50.90. Buy above 53.75-51.00 with risk daily closing below 51.00 and targeting 54.60-55.10 and 55.50-56.30.

EUR/USD

EUR/USD on Friday made an intraday low of US$1.1573/EUR, high of US$1.1656/EUR and settled the day down by 0.412% to close at US$1.1601/EUR.

Technicals in Focus:

On daily charts, prices are sustaining above 20DMA (1.1937), which become immediate support level, break below will target 1.1700-1.1600. MACD is below zero line but histograms are increasing mode which will bring bullish view. Stochastic is in neutral territory and giving negative 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 1.1660-1.1850 targeting 1.1610-1.1555 and 1.1490-1.1400 with stop-loss at daily closing above 1.1850. Buy above 1.1610-1.1400 with risk below 1.1400 targeting 1.1660-1.1700 and 1.1750-1.1800-1.1850.

GBP/USD

GBP/USD on Friday made an intra‐day low of US$1.3068/GBP, high of US$1.3161/GBP and settled the day down by 0.235% to close at US$1.3128/GBP.

Technicals in Focus:

On daily charts, prices are sustaining above 20DMA (1.3306) 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 oversold 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 1.3150-1.3300 with targets at 1.3260-1.3190-1.3100 and 1.3020- 1.2950. Buy above 1.300-1.2900 with stop loss closing below 1.2900 targeting 1.3150-1.3190 and 1.3260-1.3300-1.3360.

USD/JPY

USD/JPY on Friday made intra‐day low of JPY113.61/USD and made an intraday high of JPY114.44/USD and settled the day down by 0.219% at JPY113.61/USD.

Technicals in Focus:

In daily charts, JPY is sustaining above 200DMA (111.73), 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 Sell

Sell below 114.50-116.00 with risk above 116.00 targeting 114.00-113.60 and 113.00-112.30. Long positions above 114.00-112.30 with targets of 114.60-115.00 and 115.60-116.00 with stop below 116.00.