Daily Market Lookup

• Asia stocks hovered near a decade high on Thursday following another record breaking day on Wall Street, while the New Zealand dollar rallied as hawkish-sounding statements by the country’s central bank boosted the recently battered currency. It had reached that peak on hopes towards U.S. tax reforms being enacted. But recent uncertainty over the fate of the tax reform plans have weighed on the dollar. A U.S. Senate tax-cut bill, differing from one in the House of Representatives, was expected to be unveiled on Thursday, complicating a Republican tax overhaul push and increasing scepticism on Wall Street about the effort. Government data showing a rise in domestic crude production had weighed on oil overnight but rising tensions in the Middle East limited the losses. The dollar traded roughly unchanged on Wednesday as traders fretted over a possibility delay to President Donald Trump’s tax reform plan while a surge in the Canadian dollar weighed on the greenback. It was a quiet day on the economic calendar for top-tier data, investors milled over media reports suggesting that the Senate GOP are considering a one-year-delay in the implementation of corporate tax cuts. Also weighing on the dollar was a sharp move higher in the Canadian dollar after housing data topped expectations Statistics Canada reported on Wednesday that building permits increased 3.8% in September, confounding expectations for a 0.2% fall while a separate report showed housing starts increased by 222.800 units last month, beating expectations for a 210,000 rise. The move lower comes as the investor attention shifted to President Donald Trump’s arrival in China, where the president is expected to have lengthy discussions on North Korea with Chinese president Xi Jinping.
• Gold demand slid to its lowest in eight years in the last quarter as jewelry buying fell and inflows into bullion-backed exchange traded funds dried up, data from the World Gold Council showed on Thursday. Overall demand fell 9 percent to 915 tonnes, its weakest since the third quarter of 2009, the WGC said. That pattern is likely to feed through to the full year, with the WGC forecasting annual demand of just 3,900-4,000 tonnes, compared to 4,347 tonnes in 2016. Gold demand has not been below 4,000 tonnes on an annual basis since 2009. In the full year the WGC expects Indian demand to hold at around 650-750 tonnes, in line with a weak 2016. Chinese demand is seen at 850-950 tonnes. Elsewhere, soaring stock markets also detracted attention from gold, the WGC said, denting interest in bullion-backed ETFs. ETF inflows totaled less than 19 tonnes in the last quarter, down from 144 tonnes a year earlier, outweighing a 17 percent rise in bar and coin investment to 222 tonnes. Gold demand from the technology sector also grew, it said, due to demand for memory chips used in high-end smartphones. On the supply side, overall mine output was down 1 percent at 841 tonnes in the third quarter, while recycled gold supply dropped 6 percent to 315 tonnes.
• Crude oil gained in Asia on Thursday, rebounding from disappointing overnight U.S. inventory data and supported by continued expectations of a supply and demand rebalance. Overnight, crude oil prices settled lower on Wednesday after data showed crude supplies rose while production jumped to a record all-time high last week offsetting a larger-than-expected draw in refineries. Crude oil settled lower for the second day in row as concerns over a surge in US production weighed on upside while a mixed report from the EIA showing crude stockpiles rose while gasoline and distillate supplies fell weighed on sentiment. Preliminary U.S. production figures showed weekly output rose 0.7% to an all-time high of 9.62 million barrels per day, the EIA said, that was the highest U.S. output since June 2015. Inventories of U.S. crude rose by roughly 2.2 million barrels for the week ended Nov. 4, missing expectations of a draw of 2.8m barrels. Gasoline inventories – one of the products that crude is refined into – fell by 3.3 million barrels, confounding expectations for a draw of 1.9 million barrels while supplies of distillate – the class of fuels that includes diesel and heating oil – fell by about 3.4 million barrels, a steeper draw than the expected decline of 1.4 million barrels. The negative day for crude prices came as China’s October oil imports fell to 7.3 mn bpd from about 9 mnbpd in September, according to data from the General Administration of Customs on Wednesday. The ramp up in U.S. crude output comes a day after Opec, its 2017 World Oil Outlook, revised upwards North America shale oil to 5.1 mn bpd from 4.1 mn bpd, citing the recent rally in crude prices as one of the catalysts to drive up shale output.

Gold – XAU

Gold on Wednesday made its intraday high of US$1287.12/oz and low of US$1275.26/oz. Gold was up by 0.469% at US$1281.25/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 1290-1320 keeping stop loss closing above 1320 and targeting 1281-1274-1266 and 1260-1251. Buy above 1283-1235 with risk below 1235, targeting 1288-1300 and 1311-1320.

Silver - XAG

Silver on Wednesday made its intraday high of US$17.23/oz and low of US$16.93/oz. Silver settled up by 0.531% at US$17.02/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 17.20-17.50-17.70 and 18.00-18.60; stop breakage below 15.00. Sell below 17.20-19.00 with stop loss above 19.00; targeting 16.80-16.50 and 16.00-15.60.

Oil - WTI

Crude Oil on Wednesday made an intra‐day high of US$57.90/bbl, intraday low of US$56.40/bbl and settled down by 0.193% to close at US$56.83/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 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 57.5-60.50 with stop loss at 60.50; targeting and 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 Wednesday made an intraday low of US$1.1578/EUR, high of US$1.1610/EUR and settled the day up by 0.0863% to close at US$1.1595/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 1.1660-1.1850 targeting 1.1590-1.1555 and 1.1490-1.1400 with stop-loss at daily closing above 1.1850. Buy above 1.1590-1.1400 with risk below 1.1400 targeting 1.1660-1.1700-1.1750 and 1.1800-1.1850.

GBP/USD

GBP/USD on Wednesday made an intra‐day low of US$1.3164/GBP, high of US$1.3178/GBP and settled the day down by 0.379% to close at US$1.3114/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 negative crossover to confirm bearish 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 1.3150-1.3360 with targets at 1.3100-1.3050 and 1.3000-1.2950. Buy above 1.3100-1.2950 with stop loss closing below 1.2950 targeting 1.3260-1.3300 and 1.3360-1.3440.

USD/JPY

USD/JPY on Wednesday made intra‐day low of JPY113.38/USD and made an intraday high of JPY114.01/USD and settled the day down by 0.096% at JPY113.86/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 in neutral region and direction is difficult to predict on RSI bases MACD is above zero line but histograms are in decreasing mode which might lead to downward movement. The Stochastic Oscillator is approaching oversold territory and signaling to sell as it has given negative crossover to confirm bearish stance.

Trading Strategy: Neutral to Sell

Sell below 114.00-116.20 with risk above 116.20 targeting 113.60-113.00 and 112.30-111.50. Long positions above 113.60-111.50 with targets of 114.00-114.60-115.00 and 115.60-116.00 with stop below 116.00.