Daily Market Lookup

• Asian shares rallied to their highest in a decade on Tuesday, while oil prices gave up some of their gains having previously surged to a more than two-year peak on an anti-corruption purge by Saudi Arabia’s crown prince. The lack of clarity on the progress of U.S. tax reform as well as leadership at the U.S. central bank clouded the dollar’s outlook. Tax negotiators in the U.S. House of Representatives will seek to overcome their differences this week and work on a plan, aiming for their self-imposed deadline of passage this month. The Federal Reserve confirmed on Monday that influential monetary policymaker William Dudley plans to retire by mid-2018, leaving the leadership of the U.S. central bank unusually open. The dollar rebounded slightly in Asia against the yen on Tuesday with data sets in Australia and China ahead along with President Donald Trump in the region for more than a week of meetings. Overnight, the dollar turned negative against a basket of major currencies as rising political turmoil in the Middle East fuelled safe haven demand while news that New York Federal Reserve President William Dudley was retiring early weighed on sentiment. The dollar gave up its gains against safe-haven currencies such as the yen and Swiss franc amid political uncertainty in the Middle East after Saudi Crown Prince Mohammed bin Salman led an anti-corruption drive which resulted in series of arrests of prominent Saudi Arabians. Also adding to dollar weakness was uncertainty over the leadership of the Federal Reserve after the Federal Reserve Bank of New York confirmed that William Dudley was preparing to retire earlier than planned in mid-2018 rather than when his term ends in Jan. 19. The fall in the greenback, however, may be limited as data showed traders trimmed their bearish bets on the dollar last week. The value of the dollar's net short position, derived from net positions of International Monetary Market speculators in the yen, euro, British pound, Swiss franc and Canadian and Australian dollars, was $3.37 billion, in the week to Oct. 31, compared to a net short position of $8.02 billion in the previous week.
• Gold prices dipped in Asia on Tuesday as investors continued to eye political risk in the Middle East but shied away from new buying as the dollar rebounded regionally. Overnight, gold prices traded sharply higher on Monday as political uncertainty in the Middle East fuelled safe-haven demand. A retreat in the dollar, meanwhile, also underpinned a move higher in gold prices as investor concerns grew over the leadership of the Federal Reserve after the Federal Reserve Bank of New York confirmed that William Dudley was preparing to retire earlier than planned. Despite data showing market participants increased their bullish bets on the precious metal last week, traders expected gold prices to remain range bound with biased toward the downside. Net bullish bets on gold rose to 193,100, from 191,400 the previous week according to a report from the CFTC on Friday.
• Crude oil prices gained slightly in Asia on Tuesday with turmoil in the Middle East and top exporter Saudi Arabia in focus as well as weekly U.S. estimates of inventories. The API will releases its weekly estimates on crude and refined product stocks in the U.S. with a 2.8 million barrels drop in crude seen, a 2.100 million barrels decline in distillates and a 2.176 million barrels easing in gasoline inventories expected. On Wednesday, the EIA releases official data. The API and EIA data sets often diverge. Overnight, crude oil prices settled higher on Monday amid a spike in political uncertainty in the Middle East after Saudi Arabia Crown Prince Mohammed bin Salman, through an anti-corruption crackdown made a series of moves to consolidate his power. An anti-corruption drive led by Saudi Arabia Crown Prince Mohammed bin Salman resulted in wave arrests of prominent Saudi Arabian including royals, ministers and investors, fuelling political risk in the region. The anti-corruption crackdown comes as optimism grew for an extension to the output-cut agreement beyond March amid comments from Saudi energy minister Khalid al-Falih, who highlighted the importance of further cuts. In May, OPEC producers agreed to extend production cuts for a period of nine months until March, but stuck to production cuts of 1.2 million bpd agreed in November last year. In the U.S. meanwhile, traders continued to cheer data pointing to tightening in production after Baker Huges reported Friday that the number of oil rigs operating in the US fell by eight to 729.

Gold – XAU

Gold on Tuesday made its intraday high of US$1282.83/oz and low of US$1265.98/oz. Gold was up by 0.919% at US$1281.73/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 neutral territory and giving positive crossover to confirm bullish stance for intraday trade.

Trading Strategy: Neutral

Based on the charts and explanations above; sell below 1281-1311 keeping stop loss closing above 1311 and targeting 1274-1266-1260-1251 and 1244-1235. Buy above 1269-1235 with risk below 1235, targeting 1279-1288 and 1300-1311.

Silver - XAG

Silver on Friday made its intraday high of US$17.24/oz and low of US$16.79/oz. Silver settled up by 2.197% at US$16.79/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$57.59/bbl, intraday low of US$55.63/bbl and settled up by 1.865% to close at US$57

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 57.75-60.50 with stop loss at 60.50; targeting and 57.00-56.50-56.00 and 54.60-53.75 Buy above 57.00-54.60 with risk daily closing below 54.60 and targeting 57.75-58.85 and 59.50-60.50.

EUR/USD

EUR/USD on Monday made an intraday low of US$1.1579/EUR, high of US$1.16623/EUR and settled the day down by 0.034% to close at US$1.1609/EUR.

Technicals in Focus:

On daily charts, prices are sustaining below 100DMA (1.1700), which become immediate resistance level, break above will target 1.1750-1.1800. MACD is below zero line but histograms are increasing mode which will bring bullish view. Stochastic is in oversold territory and giving negative crossovers to signal for bearish outlook for intraday. 14D RSI is currently approaching oversold region and giving wards directions to consider buy.

Trading Strategy: Neutral to Sell

Based on the charts and explanations above; sell below 1.1700-1.1850 targeting 1.1660-1.1600-1.1555 and 1.1490-1.1400 with stop-loss at daily closing above 1.1850. Buy above 1.1660-1.1400 with risk below 1.1400 targeting 1.1700-1.1750 and 1.1800-1.1850.

GBP/USD

GBP/USD on Monday made an intra‐day low of US$1.3057/GBP, high of US$1.3173/GBP and settled the day up by 0.765% to close at US$1.3170/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 1.3260-1.3440 with targets at 1.3150-1.3100-1.3050 and 1.3000-1.2950. Buy above 1.3150-1.2950 with stop loss closing below 1.2950 targeting 1.3260-1.3300 and 1.3360-1.3440.

USD/JPY

USD/JPY on Friday made intra‐day low of JPY113.61/USD and made an intraday high of JPY114.42/USD and settled the day down by 0.0008% at JPY114.07/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 114.50-116.20 with risk above 116.20 targeting 114.00-113.60-113.00 and 112.30-111.50. Long positions above 114.00-111.50 with targets of 114.60-115.00 and 115.60-116.00 with stop below 116.00.