Daily Market Lookup

• Asian stocks fell on Tuesday as the lift from an agreement that saved the North American free trade deal faded, with cautious views on the global economy curbing risk sentiment. China's financial markets are closed for the week of Oct. 1-5 for national holidays. Hong Kong's Hang Seng, which did not trade on Monday due to a holiday, dropped 1.9 percent in reaction to signs of weakness in the Chinese manufacturing sector shown in purchasing managers' index (PMI) numbers released on Sunday IHS Markit purchasing managers' indices released on Monday showed manufacturing growth in the euro zone slowed to a two-year low at the end of the third quarter. The United States and Canada forged a last-minute deal on Sunday to salvage NAFTA as a trilateral pact with Mexico, rescuing a $1.2 trillion open-trade zone that had been about to collapse after nearly a quarter century in operation. The single currency has been hurt by concerns that a significant increase in the Italian budget will deepen Italy's debt and deficit problems.
• The yen fell while the U.S. dollar gained on Tuesday after the U.S. and Canada secured an agreement late Sunday night to replace the North American Free Trade Agreement (NAFTA) deal. “It is a great deal for all three countries,” Trump wrote on Twitter Monday. He added that the new deal could solve the many “deficiencies and mistakes in NAFTA, greatly opens markets to our Farmers and Manufacturers, reduce Trade Barriers to the U.S. and will bring all three Great Nations closer together in competition with the rest of the world.” U.S. President Donald Trump will hold a news conference on the new trade deal later in the day in Washington. While fears about international trade conflicts between the United States and major trading partners including China have lifted the dollar 3.4 percent this year, an increasingly confident U.S. Federal Reserve has also boosted the greenback. The newly minted United States-Mexico-Canada Agreement, announced on Sunday, preserves a $1.2 trillion open-trade zone that was on the brink of collapse after nearly a quarter century. U.S. President Donald Trump and Japanese Prime Minister Shinzo Abe agreed on Sept. 27 to start fresh trade talks. The greenback is now up just over 1 percent against the yen this year. It strengthened 2.3 percent against the Japanese currency in September. Italian Deputy Prime Minister Luigi Di Maio accused European Union officials of deliberately upsetting financial markets with negative comments about Italy's budget plans. He was taking aim at European Economic Affairs Commissioner Pierre Moscovici, who earlier said that Rome's plans were "obviously" deviating from EU rules on fiscal discipline.
• Oil markets were strong again on Tuesday, with Brent crude holding above $85 and near four-year highs reached the previous day as markets prepare for tighter supply once U.S. sanctions against Iran kick in next month. Sentiment was lifted by a last-gasp deal to salvage NAFTA as a trilateral pact between the United States, Mexico and Canada, rescuing a $1.2 trillion a year open-trade zone that had been about to collapse. More fundamentally, oil markets have been pushed up by looming U.S. sanctions against Iran's oil industry, which at its most recent peak this year supplied almost 3 percent of the world's almost 100 million barrels of daily consumption. Trade data in Refinitiv Eikon showed Iran's seaborne exports in September were just 1.9 million barrels per day, the lowest level since mid-2016. HSBC said in its fourth quarter Global Economics outlook that "our oil analysts believe there is now a growing risk it (crude) could touch $100 per barrel". Washington's sanctions are set to start on Nov. 4, and analysts say there may not be enough spare production capacity in the short-term to meet demand, potentially requiring large storage drawdowns. The Organization of the Petroleum Exporting Countries (OPEC), of which Iran is a member, has struggled to replace export falls from Iran, according to a Reuters survey published on Monday. With crude prices soaring and many currencies in emerging markets, including India's rupee and Indonesia's rupiah declining, analysts warn that economic growth may be eroded.

Gold – XAU

Gold on Monday made its intraday high of US$1192.32/oz and low of US$1184.51/oz. Gold down by 0.314% at US$1188.56/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 1196-1227 keeping stop loss closing above 1227, targeting 1184-1172 and 1166-1159. Buy above 1182-1159 with risk below 1159, targeting 1191-1207-1214 and 1220-1227.

Silver - XAG

Silver on Friday made its intraday high of US$14.67/oz and low of US$14.35/oz. Silver settled down by 1.262% at US$14.46/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 Monday made an intra‐day high of US$75.66/bbl, intraday low of US$72.84/bbl and settled up by 2.92% to close at US$75.35/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 overbought 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 75.60-78.00 with stop loss at 78.00; targeting 74.50-73.90-73.00 and 72.00-71.40. Buy above 74.50-71.40 with risk daily closing below 71.40 and targeting 75.60-76.50 and 77.00-78.00.

EUR/USD

EUR/USD on Monday made an intraday low of US$1.1562/EUR, high of US$1.1624/EUR and settled the day down by 0.161% to close at US$1.1577/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 1.1540-1.1380 with risk below 1.1380, targeting 1.1610-1.1690-1.1760 and 1.1800-1.1850. Sell below 1.1610-1.1850 targeting 1.1610-1.1540 and 1.1450-1.1400 with stop-loss at daily closing above 1.1850.

GBP/USD

GBP/USD on Monday made an intra‐day low of US$1.3011/GBP, high of US$1.3115/GBP and settled the day up by 0.023% to close at US$1.3040/GBP.

Technicals in Focus:

On daily charts, prices are sustaining above 50DMA (1.2977) 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 negative crossover to confirm bearish stance. MACD is above zero line but histograms are increasing lead to downward movement.

Trading Strategy: Neutral to Buy

Based on the charts and explanations above; sell below 1.3060-1.3320 with targets at 1.2990-1.2950 and 1.2890-1.2790. Buy above 1.3000-1.2800 with targets 1.3060-1.3140-1.3200 and 1.3250-1.3320 with stop loss closing below 1.2800.

USD/JPY

USD/JPY on Monday made intra‐day low of JPY113.69/USD and made an intraday high of JPY114.05/USD and settled the day up by 0.105% at JPY113.85/USD.

Technicals in Focus:

In daily charts, JPY is sustaining above 50DMA (111.56), which is major resistance on the daily chart. 14-D RSI is currently in overbought region and chances of downward are expected based on RSI. 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 114.00-116.00 with risk above 116.00 targeting 113.20-112.50-112.00-111.00 and 110.70-110.20. Long positions above 113.20-110.00 with targets of 114.00-114.70 and 115.50-116.00 with stop below 110.00.