Daily Market Lookup

• Asian share markets sprang higher on Tuesday as reports of behind-the-scenes talks between the United States and China rekindled hopes that a damaging trade war could be averted, in turn sapping life from the dollar and yen. The abrupt mood swing came amid reports Chinese and U.S. officials were busy negotiating to avert an all-out trade war. White House officials are asking China to cut tariffs on imported cars, allow foreign majority ownership of financial services firms and buy more U.S.-made semiconductors, said a person familiar with the discussions. Chinese Premier Li Keqiang on Monday pledged to maintain trade negotiations and ease access to American businesses. Yet they warned it was too early to say for sure, given President Donald Trump has had deeply held views on fair trade for decades. The sudden bout of optimism helped offset news that the United States and many of its Allies were expelling more than 100 Russian diplomats in retaliation for a nerve agent attack on a former Russian spy in Britain. The surge in stocks dragged on the Treasury market, which faces a record $294 billion of new supply this week.
• The dollar rebounded against other currencies in Asia on Tuesday morning amid receding trade tensions between the world’s two largest economies, as the U.S. and China hinted talks to ease fears of a full-blown trade war. The yen nudged lower amid revival of investor risk appetite. Investors regained an appetite for risky assets as China and the U.S. are reportedly in talks to find a mutually agreeable approach to narrow the trade deficit gap. U.S. Treasury Secretary Steven Mnuchin said he is “cautiously hopeful” that China would reach a deal to avoid tariffs on $50 billion of U.S. exports, The yuan gained against the dollar on Monday as the dollar remained weak, and the level reflected the yuan’s performance and largely matched market expectations. In response to the U.S. action, Chinese Premier Li Keqiang said on the two countries should maintain negotiations and reiterated pledges to ease access for American businesses. The return of investor risk appetite pulled the safe-haven currency lower as the market was recovering from turbulence from last week.
• The safe haven Japanese yen sagged on Tuesday as optimism that the United States and China could begin negotiations on trade helped ease concerns about a trade war, reviving demand for riskier assets. Global markets were shaken last week after U.S. President Donald Trump moved to impose tariffs on Chinese goods and Beijing threatened similar measures, sparking fears of a trade war between the world's two largest economies. But reports of behind-the-scenes talks between the United States and China have eased concerns for now that global trade frictions could escalate out of control, with traders hoping any actual U.S. measures will be much more modest than first announced. Chinese Premier Li Keqiang said on Monday it and the United States should maintain negotiations, reiterating pledges to ease access for American businesses. The yen, often viewed as a safe haven currency in times of market turbulence and economic uncertainty, partly because of the resilience provided by Japan's current account surplus, retreated due to the revival in investor risk appetite. Market participants said the yen showed limited reaction to testimony in Japan's parliament by a former finance ministry official, who said Japanese Prime Minister Shinzo Abe, his wife, Finance Minister Taro Aso and their top aides did not give instructions to change documents about a land deal at the heart of a suspected cronyism scandal. The political scandal has been seen as a factor that could spur yen-buying, as it has cast some doubt over the future of Abe's reflationary economic policy agenda, including monetary stimulus. The firmness of some of its major rivals as well as emerging market currencies helped weigh on the greenback.
• Oil prices rose on Tuesday morning in Asia, lifted by concerns that tensions in the Middle East could disrupt oil supplies. Meanwhile, China’s new crude futures kicked off to a roaring start Escalating concerns that the U.S will reimpose sanctions on Iran, which would severely limit Tehran’s ability to export crude oil, have pushed up oil prices. Further supporting oil markets is Saudi Arabia’s push for production curbs led by the OPEC and Russia to be extended into 2019, in an effort to prop up oil prices. Iraq, the second biggest producer within OPEC, said on Monday that it also supports the agreement to cut oil output. However, such a move could face opposition given the relentless increase in U.S. crude production. U.S. production has already jumped by almost a quarter since mid-2016, to 10.4 million bpd, surpassing top exporter Saudi Arabia and within reach of top producer Russia, which pumps around 11 million bpd. Production curbs from OPEC inadvertently enable the U.S. to take more market share. Also supporting oil markets are hopes that behind-the-scenes talks between the U.S. and China will prevent a looming trade war between the world’s two biggest economies. Meanwhile in Asia, Shanghai crude oil futures saw their second day of trading repeating Monday’s high volumes.

Gold – XAU

Gold on Monday made its intraday high of US$1355.82/oz and low of US$1343.39/oz. Gold was up by 0.5169% at US$1353.36/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 overbought territory and giving positive crossover to confirm bullish stance for intraday trade.

Trading Strategy: Sell on Strength

Based on the charts and explanations above; sell below 1357-1375 keeping stop loss closing above 1375 and targeting 1350-1340-1331 and 1320-1314. Buy above 1350-1310 with risk below 1310, targeting 1357-1362 and 1370-1375.

Silver - XAG

Silver on Monday made its intraday high of US$16.77/oz and low of US$16.51/oz. Silver settled up by 0.907% at US$16.68/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 overbought 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 Monday made an intra‐day high of US$66.48/bbl, intraday low of

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 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 65.50-68.00 with stop loss at 68.00; targeting 64.70-64.20-63.10 and 62.70-62.00-61.00. Buy above 64.70-62.00 with risk daily closing below 62.00 and targeting 65.50-66.60 and 67.00-68.00.

EUR/USD

EUR/USD on Monday made an intraday low of US$1.2345/EUR, high of US$1.2416/EUR and settled the day up by 0.793% to close at US$1.2443/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 1.2400-1.2600 targeting 1.2350-1.2300-1.2210 and 1.2160-1.2100 with stop-loss at daily closing above 1.2600. Buy above 1.2210-1.2050 with risk below 1.2050 targeting 1.2300-1.2350-1.2450 and 1.2510-1.2570.

GBP/USD

GBP/USD on Monday made an intra‐day low of US$1.4129/GBP, high of US$1.4244/GBP and settled the day up by 0.672% to close at US$1.4226/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 1.4150-1.4300 with targets at 1.4070-1.4010 and 1.3900-1.3855. Buy above 1.4070-1.3855 with stop loss closing below 1.3855 targeting 1.4070-1.4150 and 1.4250-1.4300.

USD/JPY

USD/JPY on Monday made intra‐day low of JPY104.62/USD and made an intraday high of JPY105.47/USD and settled the day up by 0.735% at JPY104.62/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 105.50-108.00 with risk above 108.00 targeting 104.90-104.40 and 103.90-103.10. Long positions above 104.90-103.10 with targets of 105.50-106.00-106.70 and 107.50-107.90 with stop below 104.90.