Daily Market Lookup

• Asian shares shrugged off a lackluster start and pushed higher, while the dollar edged up as investors priced in more U.S. rate hikes after upbeat economic data. Investor concern over the progress of a massive U.S. tax reform plan showed no sign of abating as two Republican lawmakers on Wednesday criticized the Senate’s latest proposal. Doubts that the latest round of talks to overhaul the North American Free Trade Agreement would make much headway in the face of tough U.S. demands saw Mexico's peso MXN= sink to an eight-month low on Wednesday, though it steadied in Asian trade. ostly upbeat economic news added to expectations that the Federal Reserve would not only hike in December, which is now almost fully priced in, but multiple times next year as well. Core U.S. inflation edged higher and retail sales beat forecasts in a positive sign for growth. Investors also suspect this tightening will slow the U.S. economy and stop inflation ever getting to the Fed’s 2 percent target, pulling down longer-term yields. As a result the gap between two- and 10-year yield has shrunk to its thinnest premium since late 2007.
• Weekly wages are rising, American consumers are spending their money and prices are following suit in signs that a continued economic recovery sets the stage for a Federal Reserve rate rise in December and the cycle beyond that, despite concerns over low levels of inflation. The U.S. core consumer price index, which strips out food and energy prices for a clearer look at underlying inflation, moved higher in October, rising after a sharp drop earlier in the year that had unnerved some U.S. policymakers. The Fed’s preferred personal consumption expenditures price index has also reversed course, rising to 1.6 percent in September from 1.4 percent in August, and analysts argue it will feed off steady wage and job growth. Average weekly earnings rose 2.6 percent for the same group of workers on an annual basis, the strongest increase since June, continuing a trend of rising wage gains under way since 2011. Taken together the data caused some forecasters to bump up their estimates of economic growth for the year, and firm their expectations for the Fed’s December action. Inflation “is gaining momentum gradually. The October data show a broadly based improvement,” said advisers from Barclays Research. The Fed “will take comfort. Macroeconomic Advisers increased its estimate for third-quarter gross domestic product growth to 3.4 percent on the basis of the retail sales figures, and suggested retail sales would continue to grow. It pushed up its fourth-quarter GDP forecast to 2.5%. The Fed has been debating through much of the year whether recent weak inflation was a signal of a developing problem in the economy, or whether low unemployment would eventually mean rising wages and prices moving closer to the Fed’s 2 percent target. If anything, New York Fed president William Dudley said at an earlier New York speech, the lull in inflation may prove a good thing - pushing up real wages and indicating that more people can be employed without price rises getting out of hand.
• Oil markets were stable on Thursday as rising U.S. crude production and inventories were countered by expectations that OPEC will extend an ongoing production cut during a meeting at the end of this month. Despite these slight gains, Brent and WTI have lost around 4 percent in value since hitting 2015 highs last week, pulled down in part by rising crude availability in the United States. U.S. crude inventories rose for a second week in a row, building by 1.9 million barrels in the week to Nov. 10 to 459 million barrels, the government's EIA said on Wednesday. That compared to analyst expectations in a Reuters poll for a decrease of 2.2 million barrels. U.S. crude oil production hit a record of 9.65 million bpd, meaning output has risen by almost 15 percent since their most recent low in mid-2016. Despite this, analysts said prices were relatively well supported due to efforts led by the OPEC to withhold oil production in order to tighten the market and prop up prices. The deal is due to expire in March 2018, but OPEC will meet on Nov. 30 to discuss policy, and it is expected to agree an extension of the cuts.

Gold – XAU

Gold on Wednesday made its intraday high of US$1289.39/oz and low of US$1276.63/oz. Gold was down by 0.181% at US$1278.04/oz.

Technicals in Focus:

In daily charts, prices are below 100DMA (1278) 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 and 1260-1251. Buy above 1274-1235 with risk below 1235, targeting 1281-1288-1300 and 1311-1320.

Silver - XAG

Silver on Wednesday made its intraday high of US$17.18/oz and low of US$16.93/oz. Silver settled down by 0.117% at US$16.97/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$55.54/bbl, intraday low of US$54.87/bbl and settled up by 0.417% to close at US$55.28/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 55.50-57.00 with stop loss at 57.00; targeting and 54.80-54.00 and 53.20-52.50. Buy above 54.80-52.50 with risk daily closing below 52.50 and targeting 55.20-56.00 and 56.50-57.00-57.75.

EUR/USD

EUR/USD on Wednesday made an intraday low of US$1.1784/EUR, high of US$1.1859/EUR and settled the day down by 0.050% to close at US$1.1790/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 1.1800-1.1990 targeting 1.1750-1.1700-1.1660 and 1.1555-1.1490 with stop-loss at daily closing above 1.1990. Buy above 1.1750-1.1610 with risk below 1.1610 targeting 1.1800-1.1850 and 1.1910-1.1990.

GBP/USD

GBP/USD on Wednesday made an intra‐day low of US$1.3129/GBP, high of US$1.3212/GBP and settled the day up by 0.373% 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 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 JPY112.47/USD and made an intraday high of JPY113.48/USD and settled the day down by 0.511% at JPY112.86/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 113.60-116.20 with risk above 116.20 targeting 113.00-112.30 and 111.50-110.60. Long positions above 113.00-110.60 with targets of 113.60-114.00-114.60 and 115.00-115.60 with stop below 116.00.