Daily Market Lookup

• Asian shares rallied and the safe-haven yen eased on Friday after North Korean leader Kim Jong Un offered to stop nuclear and missile testing and U.S. President Donald Trump agreed to a meeting that could come before May. South Korea’s national security adviser made the announcement at the White House, after delivering a letter from Kim. Trump’s aides have been wary of North Korea’s diplomatic overtures because of its history of reneging on international commitments. The chance of any easing in geopolitical tensions in the region helped Japan’s Nikkei climb 2.3 percent. South Korean stocks enjoyed their best day since May with a rise of 1.76 percent. The mood had already brightened a little after Trump pressed ahead with tariffs but offered conditional exemptions for Canada and Mexico, offering at least the hope a full-blown trade war could be averted. The White House said other countries could apply for exemptions on the 25 percent tariff on steel imports and 10 percent for aluminum, but details were sparse on when they might be granted and under what terms. Several major trading partners have said they will respond with tariffs or direct action of their own. Rising protectionism was a risk cited overnight by European Central Bank President Mario Draghi following the central bank’s latest policy meeting. While the ECB did drop its easing bias as some expected, Draghi sounded in no rush to start unwinding stimulus. The dollar gained 0.6 percent on the yen to 106.84, amid the recovery in risk appetite. Attention now turns to the Bank of Japan’s policy meeting later on Friday. Fears of a global trade war, recent market volatility and a strong yen give the bank plenty of reason to maintain its massive asset buying campaign, and to play down the prospect of an exit anytime soon.
• The number of Americans filing for unemployment benefits rebounded last week from a more than 48-year low, but the trend continued to point to robust labor market conditions. That was underscored by other data on Thursday showing job cuts announced by U.S.-based employers fell 20 percent in February. Federal Reserve officials consider the labor market to be near or a little beyond full employment. The tight jobs market is seen boosting wage growth and spurring inflation. Initial claims for state unemployment benefits increased by 21,000 to a seasonally adjusted 231,000 for the week ended March 3, the Labor Department said. Claims dropped to 210,000 in the prior week, which was the lowest level since December 1969. Economists polled by Reuters had forecast claims rising to 220,000 in the latest week. It was the 157th straight week that claims remained below the 300,000 threshold, which is associated with a strong labor market. That is the longest such stretch since 1970, when the labor market was much smaller. The dollar firmed against a basket of currencies. European Central Bank President Mario Draghi said monetary policy would remain “reactive” and that measures of underlying inflation were still subdued. Trump’s plan to impose a 25 percent tariff on steel imports and 10 percent on aluminum to protect domestic producers against competition has sparked wide condemnation and stoked fears of a trade war. The Labor Department report showed the four-week moving average of initial claims, viewed as a better measure of labor market trends because it irons out week-to-week volatility, rose 2,000 to 222,500 last week.
• Crude oil futures rose on Friday as Asian stock markets gained on news that North Korean leader Kim Jong Un will meet with U.S. President Donald Trump. The two will likely meet by May and Kim has pledged to refrain from further nuclear or missile tests, South Korea’s national security chief said late on Thursday after briefing White House officials on talks between Seoul and Pyongyang.The White House said Trump would accept the invitation at a place and time to be determined. Beyond geopolitics, oil markets were mainly concerned with soaring output from the United States C-OUT-T-EIA, which has risen by 23 percent since mid-2016, to 10.37 million barrels per day (bpd). That’s more than top exporter Saudi Arabia produces. Only Russia pumps more, at almost 11 million bpd. Unlike Middle East producers, where output is largely dictated by state-owned oil companies, U.S. producers drill and sell purely based on economics. If prices remain at current levels or rise further, U.S. drillers are profitable and will raise output; if prices stumble, U.S. production will fall. The Middle East-dominated Organization of the Petroleum Exporting Countries (OPEC) and Russia since 2017 have been leading an effort to withhold production to prop up prices.

Gold – XAU

Gold on Thursday made its intraday high of US$1328.92/oz and low of US$1318.88/oz. Gold was down by 0.258% at US$1321.78/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 1324-1358 keeping stop loss closing above 1358 and targeting 1314-1306 and 1300-1294. Buy above 1320-1310 with risk below 1310, targeting 1324-1331-1340 and 1350-1358.

Silver - XAG

Silver on Friday made its intraday high of US$16.55/oz and low of US$16.40/oz. Silver settled up by 0.060% at US$16.47/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 Thursday made an intra‐day high of US$61.26/bbl, intraday low of US$59.88/bbl and settled down by 1.617% to close at US$60.21/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 60.50-62.20 with stop loss at 62.50; targeting 59.90-59.00 and 58.60-57.90. Buy above 59.90-57.90 with risk daily closing below 57.50 and targeting 60.50-61.00 and 61.50-62.20-62.80.

EUR/USD

EUR/USD on Thursday made an intraday low of US$1.2297/EUR, high of US$1.2445/EUR and settled the day down by 0.805% to close at US$1.2310/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 1.2390-1.2600 targeting 1.2300-1.2210 and 1.2160-1.2090 with stop-loss at daily closing above 1.2600. Buy above 1.23000-1.2090 with risk below 1.2090 targeting 1.2450-1.2520 and 1.2571-1.2600.

GBP/USD

GBP/USD on Thursday made an intra‐day low of US$1.3780/GBP, high of US$1.3909/GBP and settled the day down by 0.654% to close at US$1.3805/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 Thursday made intra‐day low of JPY105.88/USD and made an intraday high of JPY106.30/USD and settled the day up by 0.113% at JPY106.17/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 positive crossover to confirm bullish 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 105.50-104.90 with targets of 106.00-106.70-107.50 and 107.90-108.45 with stop below 104.90.