Daily Market Lookup

• Asian stocks edged higher on Thursday and European markets looked set to follow as investors bet that robust U.S. economic growth will offset the drag from the Sino-U.S. trade war for a while longer. After a knee-jerk reaction to new tit-for-tat tariffs announced by Washington and Beijing on Tuesday, markets now appear to be taking a somewhat longer view, reckoning the fallout will take some time to show up in corporate earnings and not produce a sharp global shock. Markets were closely watching a European Union summit where Prime Minister Theresa May appealed to fellow EU leaders on Wednesday to drop "unacceptable" Brexit demands that she said could rip Britain apart. Rob Carnell, chief economist and head of research, Asia-Pacific at ING, said he saw more reasons to take a "glass-is-half-full" approach given the recent selloff in emerging markets. U.S. shares had been boosted on Wednesday by expectations that the impact of the Sino-U.S. trade war would be smaller than feared, with U.S. tax and other fiscal policy measures potentially outweighing any negative impact. The broader market sentiment was at odds with a new Reuters poll that showed unanimous agreement that an escalating trade war with China was bad economic policy for the United States and could cause economic growth to slow. The consensus of the poll for U.S. growth showed a slowdown to 2.0 percent in the final quarter of 2019, less than half the last reported rate of 4.2 percent. Analysts at Citi also cautioned in a note Thursday that U.S. housing data out this week showed signs of weakness despite a headline jump. This week's rise in yields comes ahead of what is expected to be a hawkish meeting of the U.S. Federal Reserve next week. All 113 economists in the Reuters poll forecast the Fed to hike rates when it meets Sept 25-26. It is expected to follow that up with one more before the end of this year, taking the fed funds rate to 2.25-2.50 percent.
• The U.S. dollar traded near a seven-week low on Thursday while the kiwi jumped after data showed the country’s second quarter economic growth topped estimates. Reports of the tariffs imposed by the U.S. and China on each other's goods being set at lower levels than expected were cited as headwind for the dollar prices, which is widely seen as safe-haven assets. The dollar was also under pressure after a report said that the U.S. and Canada are unlikely to reach an agreement on NAFTA this week. "The PBoC intervened in early August when USD/CNY breached the psychologically important 6.9 level. With the resumption of direct intervention in the USD/CNY fixing, much tighter capital controls and still relatively large FX reserves (USD3.1trn as of end-August), we believe the PBoC is both willing and able to deliver a relatively stable USD/CNY around current levels for the time being,” analysts at Nomura said. "The PBoC appears reluctant to let USD/CNY move higher, in our view, on domestic stability concerns and because of ongoing negotiations with the US on trade issues," they added.
• Oil prices climbed on Thursday morning in Asia as data from the Energy Information Administration (EIA) showed U.S. crude inventories fell to a 3.5-year low in the week of Sept. 14. The EIA reported on Wednesday that crude inventories dropped by 2.1 million barrels, slightly less than expectations of a fall of 2.7 million barrels, while the demand for gasoline in the country rose. Yet, on Tuesday, the American Petroleum Institute (API) released data that showed an increase of 1.2 million barrels in U.S. crude stocks to 397.1 million in the week to Sept. 14. Bloomberg also reported on Tuesday that Iranian oil exports fell by 35% since May, when U.S. President Donald Trump announced crude sanctions on the oil producer, which will take effect in November. The OPEC and other non-OPEC members are set to meet on Sunday in Algeria to discuss how to share the supply increases to offset the loss of Iranian supply, but sources told Reuters that no immediate action was planned. OPEC member Saudi Arabia said on Tuesday that the country is comfortable with oil prices above $80, signaling the largest oil maker might not increase output to send the price down. Amidst the escalating trade tensions between Washington and Beijing, after Trump announced 10% tariff on $200 billion worth of Chinese products, China retaliated by slapping tariffs on $60 billion worth of U.S. goods, including liquefied natural gas.

Gold – XAU

Gold on Wednesday made its intraday high of US$1206.14/oz and low of US$1197.53/oz. Gold up by 0.474% at US$1203.84/oz.

Technicals in Focus:

In daily charts, prices are below 50DMA (1227) and breakage above will call for1240-1260. 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 1200-1235 keeping stop loss closing above 1235, targeting 1196-1189-1180 and 1172-1166.Buy above 1196-1172with risk below 1172, targeting 1207-1214 and 1220-1227-1235.

Silver - XAG

Silver on Wednesday made its intraday high of US$14.32/oz and low of US$14.12/oz. Silver settled up by 0.708% at US$14.22/oz.

Technicals in Focus:

On daily charts, silver is sustaining below 200DMA (16.69), breakage above will lead to17.25-17.70. 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 14.00-12.40 targeting 14.40-14.90-15.10 and 15.60-16.35; stop breakage below 13.00. Sell below 14.50-17.00 with stop loss above17.00; targeting 14.50-13.90 and 13.50-13.30.

Oil - WTI

Crude Oil on Wednesday made an intra‐day high of US$71.02/bbl, intraday low of US$71.02/bbl and settled up by 2.101% to close at US$70.93/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 for62.20-62.80. 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 71.40-73.90 with stop loss at 73.90; targeting 70.60-70.00 and 69.00-68.50-67.60. Buy above 70.60-67.00 with risk daily closing below 67.00 and targeting 71.40-72.00 and 73.00-73.90.

EUR/USD

EUR/USD on Wednesday made an intraday low of US$1.1649/EUR, high of US$1.1714/EUR and settled the day up by 0.0717% to close at US$1.1671/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 1.1660-1.1450 with risk below 1.1450, targeting 1.1690-1.1760 and 1.1800-1.1850. Sell below 1.1690-1.1850 targeting 1.1660-1.1610-1.1540 and 1.1450-1.1400 with stop-loss at daily closing above 1.1850.

GBP/USD

GBP/USD on Wednesday made an intra‐day low of US$1.3097/GBP, high of US$1.3214/GBP and settled the day down by 0.022% to close at US$1.3097/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 overbought 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; sell below 1.3100-1.3310 with targets at 1.3060-1.2990 and 1.2950-1.2870-1.2800. Buy above 1.3060-1.2800 with targets 1.3100-1.3140-1.3200 and 1.3250-1.3300 with stop loss closing below 1.2800.

USD/JPY

USD/JPY on Wednesday made intra‐day low of JPY111.75/USD and made an intraday high of JPY112.11/USD and settled the day up by 0.456% at JPY112.27/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 112.50-114.70 with risk above 114.70 targeting 111.00-110.70-110.20 and 109.80-109.00. Long positions above 112.00-109.40 with targets of 112.00-112.50 and 113.50-114.00 with stop below 107.00.