Daily Market Lookup

• Asian shares stepped back from decade highs on Tuesday as Chinese stocks stumbled for a second straight session, while the U.S. dollar trod water ahead of a crucial Senate vote on tax reform Investor confidence in China has been dented by rising bond yields as Beijing steps up its crackdown on shadow banking and other risky forms of financing. Higher borrowing costs threaten to squeeze corporate profits. The dollar got a brief boost overnight when President Donald Trump tweeted that the tax cut bill was "coming along very well". The tweet came after a meeting with Senate Republican tax-writers on Monday ahead of a crucial vote on the Senate floor that could come as early as Thursday. Separately, the U.S. Senate Banking Committee holds a hearing on Tuesday to confirm the nomination of Jerome Powell at the helm of the Federal Reserve. If confirmed, Powell will have to balance tightening policy against still sluggish wages and inflation. The dollar eased in Asia on Wednesday as a slate of Fed speakers joined by the US treasury secretary is ahead and markets keep an eye on the Korean Peninsula for risk trade. A Japanese diplomat warned on Monday that radio signals detected from the North Korea indicated another North Korean missile test was close, fuelling demand for safe-haven gold. “There is a possibility of missiles launches in the next few days,” a Japanese government official said on Monday, according to Japan's Kyodo news agency. The potential of fresh missile launches from the Kim Jong-un led nation is believed to be part of the North Korea army’s winter training regime. Later on Tuesday is the Jerome Powell Fed Chair confirmation hearing starting at 10am ET before the Senate Banking Committee. As well, New York Fed President William Dudley will speak at 9:15 ET at the New York Fed. Philadelphia Fed President Patrick Harker will speak at 10:15am ET at the Philadelphia Fed. Treasury Secretary Steven Mnuchin is slated to make remarks at 3:45pm at the New York Fed. Attention has also shifted back to President Trump’s tax reform plans. Trump will hold a meeting with Senate Republicans on Tuesday to discuss efforts to pass the proposed legislation.
• As a nominee to lead the Fed, veteran governor Jerome Powell sides with the outgoing chair Janet Yellen in arguing that the Fed’s easy money policy has paid off by bringing millions back to work without any clear sign it has thrown markets off kilter. Jerome Powell, U.S. President Donald Trump's nominee to become chairman of the U.S. Federal Reserve at the announcement event in the Rose Garden of the White House in Washington, U.S. on Nov 2, 2017. In remarks released ahead of his hearing by the Senate Banking Committee which is due on Tuesday, Powell said the Fed needed the capacity “to respond decisively and with appropriate force” to new threats to the economy. In the past, however, Powell has been more cautious about the risks posed by such an expansive approach. In his first months at the Fed, Powell was among those who pressured then chair Ben Bernanke for more clarity on when the central bank would start scaling back its bond buying. When Bernanke made those plans public it triggered a “taper tantrum” spike in market interest rates in the summer of 2013, forcing Bernanke, Powell and others to do damage control. As Powell former colleagues, associates and former Fed staff say the key unanswered question is whether his evolution - from a former investment banker wary of an expanding Fed to a supporter of Yellen’s jobs-first approach - represents a change of heart, or rather the outgoing chair’s imprint on the current debate. Powell will inherit a strong economy, low inflation and a clear near-term policy path set by Yellen. What is not clear is how he would respond to another recessionary shock, Minneapolis Fed President Narayana Kocherlakota, who himself transitioned from a policy hawk to dove while in office, told Reuters. Powell will come under particular scrutiny as the first non-economist to run the Fed since William Miller in the 1970s, who was at odds with markets and his colleagues over his reluctance to raise rates to fight high inflation.
• Oil prices slipped in Asian trade on Tuesday amid uncertainty over a possible extension of output cuts by major crude producers and expectations of higher supply as the Keystone pipeline restarts. U.S. crude touched $59.05 a barrel on Friday, the highest level since mid-2015, fueled by the outage of the Keystone pipeline, one of Canada's main crude export routes to the United States. But TransCanada Corp this week said it would restart the 590K bpd pipeline at reduced pressure later on Tuesday after getting approval from U.S. regulators. Uncertainty over Russia's determination to join with other major oil producers in extending crude production curbs beyond next March has weighed on oil markets. Members of the OPEC and other key producers, including Russia, will meet on Nov. 30 to discuss whether to continue with the cuts after they agreed last January to withhold 1.8mn bpd of output. Russia's economy was negatively affected in October by the ongoing curbs, which saw Moscow agree to cut output by 300K bpd, Economy Minister Maxim Oreshkin said on Nov. 23. Goldman Sachs said the outcome of the meeting was "much more uncertain than usual", adding that the market faced downside risks. Consultancy Wood Mackenzie said it looked as if producers had nearly concluded an agreement to extend cuts until the end of next year. Some traders are also starting to consider the possibility that while producers will agree to extend the curbs, the scale of the output cuts will be reduced from the current 1.8 mn bpd.

Gold – XAU

Gold on Monday made its intraday high of US$1299.14/oz and low of US$1286.62/oz. Gold was up by 0.463% at US$1294.26/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 1300-1331 keeping stop loss closing above 1320 and targeting 1290-1280-1274 and 1266-1260. Buy above 1284-1250 with risk below 1250, targeting 1300-1311 and 1321-1330.

Silver - XAG

Silver on Monday made its intraday high of US$16.99/oz and low of US$16.99/oz. Silver settled down by 0.058% at US$17.03/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 Monday made an intra‐day high of US$58.97/bbl, intraday low of US$57.52/bbl and settled down by 1.917% to close at US$57.81/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 58.50-60.50 with stop loss at 60.50; targeting and 57.70-57.00-56.00 and 56.50-55.40. Buy above 57.50-54.80 with risk daily closing below 54.80 and targeting 58.50- 59.60 and 60.50-61.20.

EUR/USD

EUR/USD on Friday made an intraday low of US$1.1896/EUR, high of US$1.1960/EUR and settled the day up by 0.259% to close at US$1.1897/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 overbought territory and giving positive crossovers to signal for bullish 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 1.1930-1.12090 targeting 1.1850-1.1800-1.1750 and 1.1700-1.1660-1.1590 with stop-loss at daily closing above 1.2040. Buy above 1.1850-1.1700 with risk below 1.1700 targeting 1.1930-1.1990 and 1.2050-1.2090.

GBP/USD

GBP/USD on Monday made an intra‐day low of US$1.3309/GBP, high of US$1.3382/GBP and settled the day up by 0.045% to close at US$1.3316/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 1.3360-1.3570 with targets at 1.3300-1.3260-1.3200 and 1.3100-1.3050. Buy above 1.3300--1.2950 with stop loss closing below 1.2950 targeting 1.3260-1.3300 and 1.3360-1.3440.

USD/JPY

USD/JPY on Monday made intra‐day low of JPY110.83/USD and made an intraday high of JPY111.68/USD and settled the day down by 0.376% at JPY111.08/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 111.50-114.00 with risk above 114.00 targeting 111.00-110.60 and 110.00-109.10. Long positions above 111.0-109.10 with targets of 111.50-112.00 and 113.00-113.60-114.00 with stop below 116.00.