Daily Market Lookup

• Global stocks and the dollar slumped on Wednesday after a key advocate for free trade in the White House resigned, fanning fears that President Donald Trump will proceed with tariffs and risk a trade war. White House economic adviser Gary Cohn, seen as a bulwark against protectionist forces within the Trump administration, said on Tuesday he was leaving. The Bank of Japan can come up with a new policy framework if needed to achieve its inflation target, Masazumi Wakatabe, one of the government’s two nominees for BOJ deputy governor, said on Wednesday. Masazumi Wakatabe and Masayoshi Amamiya, the government's nominees for next Bank of Japan deputy governors, attend a confirmation hearing in the lower house of parliament in Tokyo, Japan, March 5, 2018. Wakatabe said the BOJ had various tools available if it needed to ramp up stimulus, though he had no preset idea on whether additional monetary easing was needed to achieve its target. “There are various things the BOJ can do under its yield curve control policy. It can strengthen its existing tool kit, or could come up with a new policy,” he told an upper house confirmation hearing.
• The dollar continued to slide in Asia on Wednesday morning as another resignation from Trump’s White House strengthened the pro-tariff forces and hurt investors’ confidence in the greenback. Gary Cohn, Trump's top economic advisor, is leaving the Trump administration due to disputes over the president's tariff plan. The White House also said it was considering imposing wider curbs on China and clamping down on Chinese investments in the US. Investors suspected Trump’s protectionism may result in a weaker dollar that stimulates exports and high tariffs that curb imports. Fears of a global trade war revived following Cohn’s resignation. The safe-haven currency gained grounds as signals were mixed whether Trump would translate his tariff plans into policy. Eyes will be on Japan’s Q4 GDP data that are due tomorrow morning.
• Oil prices fell on Wednesday, pulled down by weaker stock markets after a key advocate for free trade in the U.S. government resigned, stoking concerns Washington will go ahead with import tariffs and risk a trade war. Soaring U.S. crude oil production and rising inventories also dragged on crude prices, traders said. Gary Cohn, economic adviser to U.S. President Donald Trump, seen as a bulwark against protectionist forces within the government, said on Tuesday he was resigning, triggering a more than 1 percent fall in S&P 500 futures in early Wednesday trade. Major powers, including the European Union and China, have warned that such tariffs could lead to retaliatory action and trigger a global trade war, which could grind to a halt economic growth and, by extension, oil consumption. Traders said oil prices were also weighed down by a reported rise in U.S. crude oil inventories. Crude inventories rose by 5.661 million barrels in the week to 426.880 million barrels, data from the American Petroleum Institute showed on Tuesday. Official data by the U.S. EIA is due on Wednesday. Overall, oil supplies are ample despite efforts led by the OPEC and Russia to withhold output in order to prop up prices. The EIA on Tuesday made its latest in a series of upward revisions for U.S. crude oil production, which it now expects to rise by more than 120K bpd to 11.17 mn bpd by the fourth quarter of 2018.That would take the United States past Russia to become the world’s biggest oil producer. The U.S. already passed top exporter Saudi Arabia late last year. For 2019, the EIA forecast a crude production increase of 570,000 bpd to 11.27 million bpd. The drop in prices followed a decline of more than 1 percent in S&P 500 Futures, triggered by the resignation of a key advocate for free trade in the U.S. Gary Cohn, economic adviser to U.S. President Donald Trump, said on Tuesday he was resigning, fueling growing concerns that Washington would go ahead with protectionist measures including the proposed import tariffs, which could risk a trade war. A global trade war could bring economic growth to a standstill, and by extension, drag down oil consumption. Major powers including the European Union and China have warned that if implemented, the new tariffs could lead to retaliatory action. Crude inventories increased by 5.661 million barrels in the week to 426.880 million barrels, according to recent data from the American Petroleum Institute. Oil supplies remain ample despite efforts from the OPEC and Russia to reduce output in order to support prices. OPEC has been cutting back output by around 1.2 million barrels per day (bpd) since January 2017, with output falling to a 10-month low in February 2018. The pact will run through the end of this year. However, the U.S. has simply taken the market share from OPEC producers by ramping up its shale oil production. Once the world’s top oil importer, the U.S. has increased its oil output to over 10 million bpd and is moving closer to self-sufficiency The U.S. has already risen past top exporter Saudi Arabia, and is set to overtake Russia as the world’s largest oil producer by 2019 at the latest.

Gold – XAU

Gold on Tuesday made its intraday high of US$1338.40/oz and low of US$1319.54/oz. Gold was down by 1.128% at US$1334.49/oz.

Technicals in Focus:

In daily charts, prices are below 20DMA (1329) and breakage above will call for 1280-1290. 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: Sell on Strength

Based on the charts and explanations above; sell below 1340-1366 keeping stop loss closing above 1366 and targeting 1331-1324 and 1314-1306-1300. Buy above 1320-1310 with risk below 1310, targeting 1331-1340 and 1350-1358-1366.

Silver - XAG

Silver on Tuesday made its intraday high of US$16.85/oz and low of US$16.37/oz. Silver settled up by 2.074% at US$16.73/oz.

Technicals in Focus:

On daily charts, silver is sustaining below 200DMA (16.82), breakage above will lead to 17.25-17.70. 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 neutral 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 16.50-15.00 targeting 17.00-17.75 and 18.20-18.60; stop breakage below 15.00. Sell below 17.00-18.20 with stop loss above 18.20; targeting 16.20-15.60 and 15.00-14.50.

Oil - WTI

Crude Oil on Tuesday made an intra‐day high of US$63.09/bbl, intraday low of US$62.07/bbl and settled up by 1.677% to close at US$62.21/bbl.

Technicals in Focus:

On daily charts, oil is sustaining below its 50DMA i.e. 61.15 which is a major resistance and breakage above will call for 62.20-62.80. MACD is above zero line and histograms are in increasing mode will bring bearish stance in the upcoming sessions. The Stochastic Oscillator is in neutral 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 62.80-64.70 with stop loss at 64.70; targeting 62.20-61.50-61.00 and 60.50-59.90. Buy above 62.00-59.00 with risk daily closing below 59.00 and targeting 62.80-63.40 and 64.00-64.70.

EUR/USD

EUR/USD on Tuesday made an intraday low of US$1.2327/EUR, high of US$1.2419/EUR and settled the day up by 0.551% to close at US$1.2402/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 neutral 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 1.2450-1.2600 targeting 1.2390-1.2300-1.2210 and 1.2160-1.2090- with stop-loss at daily closing above 1.2600. Buy above 1.2390-1.2090 with risk below 1.2090 targeting 1.2450-1.2520 and 1.2571-1.2600.

GBP/USD

GBP/USD on Tuesday made an intra‐day low of US$1.3815/GBP, high of US$1.3929/GBP and settled the day up by 0.274% to close at US$1.3885/GBP.

Technicals in Focus:

On daily charts, prices are sustaining above 50DMA (1.3431) 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 neutral 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 1.3855-1.4070 with targets at 1.3800-1.3765 and 1.3700-1.3620- 1.3550. Buy above 1.3800-1.3620 with stop loss closing below 1.3620 targeting 1.3855-1.3900 and 1.3950-1.4050.

USD/JPY

USD/JPY on Tuesday made intra‐day low of JPY105.84/USD and made an intraday high of JPY106.45/USD and settled the day down by 0.0659% at JPY106.11/USD.

Technicals in Focus:

In daily charts, JPY is sustaining below 200DMA (111.15), which is major resistance 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 overbought territory and signaling to sell as it has given negative crossover to confirm bearish stance.

Trading Strategy: Neutral to Sell

Sell below 106.70-109.00 with risk above 109.00 targeting 106.00-105.50 and 104.90-104.20. Long positions above 106.00-104.50 with targets of 106.70-107.50-107.90 and 108.45-109.00 with stop below 104.90.