Daily Market Lookup

• Asia share markets skidded and the euro hit one-year lows on Monday as a renewed rout in the Turkish lira infected the South African rand and drove demand for safe harbors, including the U.S. dollar, Swiss franc and yen. China's blue chip index shed 1.4 percent, while Hong Kong stocks lost 1.6 percent as the local dollar fell to the limits of its trading band. Much of the early action was in currencies with the euro gapping lower as the Turkish lira took another slide to all-time lows around 7.2400. The lira found just a sliver of support when Turkish Finance Minister Berat Albayrak said the country had drafted an action plan to ease investor concerns and the banking watchdog said it limited swap transactions. Yet the dollar was still up almost 10 percent on the day at 7.0000 lira. This time last month it was at 4.8450. The currency tumbled on worries over Turkish President Tayyip Erdogan's increasing control over the economy and deteriorating relations with the United States. The Turkish equity market was less than 2 percent of the size of the UK market, and only 20 percent was held by non-residents, he added.
• The euro was soft near 13-month lows on Monday as a slide in the Turkish lira sparked a sharp sell-off in the South African rand and boosted demand for safe havens such as the U.S. dollar and the yen. The euro was hit hard on Friday after the Financial Times, citing two sources, reported that the European Central Bank had concerns about banks in Spain, Italy and France and their exposure to Turkey. Turkey's lira pulled back from an overnight record low of 7.24 to the dollar on Monday after the central bank pledged to provide liquidity and cut lira and foreign currency reserve requirements for Turkish banks. The announcement came after Finance Minister Berat Albayrak said authorities would start implementing an economic action plan on Monday morning, following Friday's lira crash, which has spread to global markets. The central bank said it cut the lira's reserve requirement ratio, a cash buffer held by banks, by 250 basis points for all maturity brackets and lowered reserve requirement ratios for non-core FX liabilities by 400 basis points for maturities up to three years. These moves will free up 10 billion lira, $6 billion, and $3 billion equivalent of gold liquidity in the financial system, the bank said. It also pledged to provide "all the liquidity banks need".
• Gold prices fell on Monday as the recent Turkish Lira crisis pushed the U.S. dollar higher. The U.S. imposed sanctions and doubled tariffs on the Turkey’s steel and aluminum on Friday to 50% and 20% respectively. Andrew Kenningham, chief global economist at Capital Economics, said, “The plunge in the lira which began in May now looks certain to push the Turkish economy into recession and it may well trigger a banking crisis.” In response, Turkey announced on Sunday that it has drafted an economic action plan to ease investor concerns. Elsewhere, reports on Monday suggested that China’s demand for gold is rising. David Harquail, chairman of the World Gold Council (WGC), estimated that gold consumption will continue to grow in China and that it would purchase about 30% of the gold sold globally, in the form of jewelry. WGC also said that in the second quarter, demand for gold fell by 4% year-on-year globally and purchases for investment purpose also slid 9%, but China’s consumption of gold went up by 7% year-on-year.
• Oil prices dipped on Monday as rising trade tensions and economic woes in emerging markets dented the outlook for fuel demand growth, but U.S. sanctions against Iran still pointed towards tighter supply. Traders said the demand outlook for oil was dimming due to ongoing trade disputes between the United States and China, as well as economic trouble in Turkey potentially spreading across emerging markets. Hedge funds and other money managers reduced their bullish positions in U.S. crude futures and options in the week ending on Aug. 7, data from the U.S. Commodity Futures Trading Commission showed on Friday. In broader markets, the concerns about Turkey's financial stability stoking fears of contagion among other emerging markets, especially in Asia, pulled down stocks. Beyond the darkening economic outlook, Phillip Futures said hedge funds had reduced bullish bets on oil because of "rising production levels from OPEC and the United States." U.S. energy companies last week added the most oil rigs since May, adding 10 rigs to bring the total count to 869, according to the Baker Hughes energy services firm. That was the highest level of drilling activity since March 2015. Despite the cautious mood in oil markets, there were drivers keeping prices from falling further. The United States has started implementing new sanctions against Iran, which from November will also target the country's petroleum sector. Iran is the third-largest producer among the members of the OPEC.

Gold – XAU

Gold on Friday made its intraday high of US$1216.99/oz and low of US$1205.59/oz. Gold down by 0.075% at US$1211.27/oz.

Technicals in Focus:

In daily charts, prices are below 50DMA (1284) and breakage above will call for 1296-1300. 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 neutral 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 1211-1240 keeping stop loss closing above 1240 and targeting 1204-1194 and 1189-1180. Buy above 1211-1180 with risk below 1180, targeting 1220-1228 and 1236-1240-1251.

Silver - XAG

Silver on Friday made its intraday high of US$15.43/oz and low of US$15.27/oz. Silver settled down by % at US$15.30/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 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 15.10-13.90 targeting 15.60-16.35-17.00 and 17.75-18.20; stop breakage below 15.00. Sell below 15.60-17.00 with stop loss above 17.00; targeting 15.30-14.80 and 14.50-13.90.

Oil - WTI

Crude Oil on Friday made an intra‐day high of US$67.28/bbl, intraday low of US$65.58/bbl and settled up by 1.514% to close at US$67.17/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 67.00-69.00 with stop loss at 69.00; targeting 66.50-66.00 and 65.00-63.95. Buy above 66.50-63.95 with risk daily closing below 63.95 and targeting 69.00-69.50 and 70.20-71.00.

EUR/USD

EUR/USD on Friday made an intraday low of US$1.1387/EUR, high of US$1.1535/EUR and settled the day down by 0.989% to close at US$1.1410/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 oversold 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 sell.

Trading Strategy: Neutral to Buy

Buy above 1.1450-1.1290 with risk below 1.1290, targeting 1.1660-1.1510-1.660 and 1.1750-1.1820-1.1900. Sell below 1.1510-1.1770 targeting 1.1450-1.1400 and 1.1365-1.1290 with stop-loss at daily closing above 1.1770.

GBP/USD

GBP/USD on Friday made an intra‐day low of US$1.2722/GBP, high of US$1.2835/GBP and settled the day down by 0.374% to close at US$1.2771/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 1.2840-1.2990 with targets at 1.2770-1.2700 and 1.2660-1.2580. Buy above 1.2770-1.2580 with targets 1.2840-1.2900-1.2950 and 1.2990-1.3040 with stop loss closing below 1.2700.

USD/JPY

USD/JPY on Friday made intra‐day low of JPY110.50/USD and made an intraday high of JPY111.16/USD and settled the day down by 0.225% at JPY111.80/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 buy as it has given positive crossover to confirm bullish stance.

Trading Strategy: Neutral to Sell

Sell below 112.00-114.20 with risk above 114.20 targeting 111.40-111.00-110.60 and 109.80-109.00. Long positions above 111.40-109.820 with targets of 111.40-112.00 and 113.50-114.00-114.90 with stop below 107.00.