Daily Market Lookup

• Asian stocks slumped to nine-month lows on Thursday as investors worried that the Trump administration's approach to trade is harming global economic growth - even as the White House approach to Chinese investment in U.S. technology companies appeared to be softening. MSCI's broadest gauge of the world's stock markets fell to its lowest level in almost three months, on course to post its fourth losing month in the last five. Its emerging market index hit its weakest level since mid-August. In China, shares remained fragile after taking a battering from worries about a wobbly yuan and the trade dispute with the United States, which has investors braced for a rocky second half of the year Trump said on Wednesday he would use a strengthened national security review process to thwart Chinese acquisition of sensitive American technologies, a softer approach than imposing China-specific investment restrictions. Although that lifted U.S. stocks initially, optimism quickly evaporated after White House economic adviser Larry Kudlow said Trump's remarks did not indicate a softened stance on China. Markets remain anxious about Trump's hard-line approach to trade relations, with early signs his stance may not only be backfiring on him but also hurting the global economy. Two U.S. major auto trade groups on Wednesday warned the administration that imposing tariffs of up to 25 percent on imported vehicles would cost hundreds of thousands of auto jobs, dramatically hike prices on vehicles, and threaten industry spending on self-driving cars. The euro was hit by political uncertainty in Germany although Chancellor Angela Merkel's coalition partner said it was not seeking to break up the government.
• The dollar was steady against its peers on Thursday, having failed to extend overnight gains amid conflicting signals from Washington on a proposal to restrict Chinese investment as the bitter U.S.-China trade row kept financial markets on edge. Demand stoked by the looming end of 2018's first half was seen supporting the dollar, which was not dented by lower U.S. yields and a slide in Wall Street shares. The greenback had advanced after U.S. President Donald Trump said on Wednesday he will use a strengthened national security review process to thwart Chinese acquisitions of sensitive American technologies, a softer approach than imposing China-specific investment restrictions. There was, however, some confusion about Washington's intentions - with U.S. shares making an about-turn and dropping - after White House economic adviser Larry Kudlow told Fox Business Network later on Wednesday that Trump's announced plan did not indicate a softened stance on China. Treasury Secretary Steven Mnuchin had favored a more measured and global approach to protecting U.S. technology, using authority approved by Congress, while White House trade adviser Peter Navarro, the administration's harshest China critic, had argued for China-specific restrictions. German Chancellor Angela Merkel's fragile coalition government faces potential collapse as the Christian Social Union (CSU), her Bavarian ally, has threatened to defy her and impose border controls unless their demands to reduce Germany's immigration burden are met. At the European Council Summit later on Thursday, Merkel will try to secure agreements on immigration on a continental level to appease the CSU.
• U.S. oil prices dropped away from three-and-a-half year highs on Thursday amid high output from Russia, the United States and Saudi Arabia, although unplanned supply disruptions elsewhere and record demand stemmed a bigger decline. Oil prices have been rallying for much of 2018 on tightening market conditions due to record demand and voluntary supply cuts led by the Middle East dominated producer cartel of the OPEC. Unplanned supply disruptions from Canada to Libya and Venezuela have added to those cuts. Although output growth is slowing, U.S. crude production is approaching 11 million barrels per day (bpd). With Russia and Saudi Arabia at similar levels, and output expected to rise as OPEC and Russia ease their supply restrictions, there will soon be three countries pumping out 11 million barrels of crude each and every day. This unprecedented output means just three countries are meeting a third of world consumption. Despite this, analysts warn that the market has little spare capacity to deal with further disruptions. Despite rising U.S. output, U.S. commercial crude oil inventories dropped by almost 10 million barrels in the week to June 22, to 416.64 million barrels, according to the Energy Information Administration on Wednesday. The stock draw was also due to high exports of almost 3 million bpd, coupled with domestic refinery activity hitting a utilization rate of 97.5 percent, the highest in at least a decade.Oil demand has been chasing records for most of 2018, but the outlook is dimming amid escalating trade disputes between the United States and other major economies including China and the European Union.

Gold – XAU

Gold on Wednesday made its intraday high of US$1259.58/oz and low of US$1250.61/oz. Gold was down by 0.545% at US$1251.91/oz.

Technicals in Focus:

In daily charts, prices are above 50DMA (1326) and breakage below will call for 1316-1300. 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 1260-1290 keeping stop loss closing above 1290 and targeting 1251-1243 and 1236-1220. Buy above 151-1220 with risk below 1220, targeting 1260-1265-1271 and 1278-1289.

Silver - XAG

Silver on Wednesday made its intraday high of US$16.29/oz and low of US$16.13/oz. Silver settled down by 1.415% at US$16.02/oz.

Technicals in Focus:

On daily charts, silver is sustaining below 200DMA (16.69), 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 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 16.00-14.90 targeting 16.35-16.60-17.00 and 17.75-18.20; stop breakage below 15.00. Sell below 16.60-18.20 with stop loss above 18.20; targeting 16.60-16.30-16.00 and 15.60-15.00.

Oil - WTI

Crude Oil on Wednesday made an intra‐day high of US$72.41/bbl, intraday low of US$70.05/bbl and settled up by 3.508% to close at US$71.64/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 oversold 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 71.90-75.00 with stop loss at 75.00; targeting 70.70-66.90-69.00 and 68.10-67.00. Buy above 70.70-68.10 with risk daily closing below 68.10 and targeting 71.90-72.50-73.00 and 74.00-75.00.

EUR/USD

EUR/USD on Wednesday made an intraday low of US$1.1539/EUR, high of US$1.1671/EUR and settled the day down by 0.798% to close at US$1.1552/EUR.

Technicals in Focus:

On daily charts, prices are sustaining above 100DMA (1.2164), which become immediate resistance level, break below will target 1.2150-1.2000. MACD is below zero line but histograms are increasing mode which will bring bullish view. Stochastic is in neutral 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 Buy

Buy above 1.1500-1.1300 with risk below 1.1300 targeting 1.1600-1.1650-1.1700 and 1.1820-1.1900. Sell below 1.1600-1.1900 targeting 1.1500-1.1490-1.1450 and 1.1370-1.1300 with stop-loss at daily closing above 1.1900.

GBP/USD

GBP/USD on Wednesday made an intra‐day low of US$1.3105/GBP, high of US$1.3233/GBP and settled the day down by 0.771% to close at US$1.3113/GBP.

Technicals in Focus:

On daily charts, prices are sustaining above 50DMA (1.3953) 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 positive crossover to confirm bullish stance. MACD is below zero line and histograms are decreasing lead to downward movement.

Trading Strategy: Neutral to Buy

Based on the charts and explanations above; short positions below 1.3260-1.3500 with targets at 1.3260-1.3200-1.3100 and 1.3060-1.3000. Buy above 1.3200-1.3025 with targets 1.3260-1.3300-1.3360 and 1.3400-1.3450 with stop loss closing below 1.3160.

USD/JPY

USD/JPY on Wednesday made intra‐day low of JPY109.67/USD and made an intraday high of JPY110.48/USD and settled the day up by 0.218% at JPY110.24/USD.

Technicals in Focus:

In daily charts, JPY is sustaining below 200DMA (109.62), 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 109.80-112.00 with risk above 112.00 targeting 109.00-108.40 and 107.60-107.00. Long positions above 109.00-107.00 with targets of 109.80-110.50-111.00 and 111.50-112.00 with stop below 107.00.