Daily Market Lookup

• The dollar inched up on Friday and remained near one-and-a-half-month highs ahead of the much anticipated U.S. job data due later in the day. The gain in dollar followed a spike in Treasury yields on better-than-expected U.S. data and indications from the Federal Reserve that interest rates will continue to rise. The yield on the benchmark United States 10-Year Treasury rose to levels not seen since 2011 after upbeat economic data and hawkish comments from Fed Chairman Jerome Powell bolstered expectations of an interest rate increase in December. Fed Chairman Jerome Powell said Wednesday that the U.S. central bank may raise interest rates above an estimated "neutral" setting as the U.S. economy continues to grow. Look ahead, the September employment report is expected to take center stage later in the day in the U.S. A strong payrolls report, especially if wage growth appears to be in check, could further boosts treasuriy yields and impact equities, according to analysts. The Labor Department will release the numbers at 08:30AM ET (12:30 GMT). On average, economists expect that nonfarm payrolls rose by 185,000 last month, down from a rise of 201,000 in August. The jobless rate is expected to tick down to 3.8%. Average hourly earnings are forecast to have risen 0.3% in September, a 2.8% gain year on year.
• The U.S. economy likely created jobs at a brisk clip in September, with the unemployment rate probably falling to an 18-year low of 3.8 percent, signaling a further tightening in labor market conditions. People wait in line at a stand during the Executive Branch Job Fair hosted by the Conservative Partnership Institute at the Dirksen Senate Office Building in Washington, The Labor Department’s closely watched monthly employment report on Friday is also expected to show a steady rise in wages, suggesting moderate inflation pressures, which could ease concerns about the economy overheating and keep the Federal Reserve on a path of gradual interest rates increases. Nonfarm payrolls likely increased by 185,000 jobs last month after surging 201,000 in August, according to a Reuters survey of economists. September’s anticipated job gains would match the monthly average for the past three months. The economy needs to create roughly 120,000 jobs per month to keep up with growth in the working-age population. Fed Chairman Jerome Powell said on Tuesday that the economy’s outlook was “remarkably positive” and he believed it was on the cusp of a “historically rare” era of ultra-low unemployment and tame inflation. The U.S. central bank raised interest rates last week for the third time this year and removed the reference in its post-meeting statement to monetary policy remaining “accommodative.” A robust labor market is underpinning the economy and together with high savings could support consumer spending as the stimulus from the Trump administration’s $1.5 trillion tax cut package fades. Economists expected only a marginal impact on payrolls from Hurricane Florence, which lashed South and North Carolina in mid-September. The storm, which caused massive flooding, made landfall at the tail end of the survey week for payrolls. With September’s increase below the 0.5 percent gain notched during the same period last year, that would lower the annual increase in wages to 2.8 percent from 2.9 percent in August, which was the biggest rise in more than nine years.
• Oil prices rose on Friday as traders anticipated a tighter market due to U.S. sanctions against Iran's crude exports, which are set to start next month. The gains helped claw back some of the losses from the previous session due to rising U.S. inventories and after Saudi Arabia and Russia said they would raise output to at least partly make up for expected disruptions from Iran. U.S. sanctions will start targeting Iran's crude exports from November 4, and Washington is putting pressure on governments and companies globally to fall in line. The investment bank said there was currently enough oil to meet demand, but warned that "global spare capacity is dwindling to the lowest level that we can document ... meaning any further supply disruptions would be difficult for the market to manage - and could lead to spiking crude oil prices." An expectation of tighter markets is fuelling bullish financial oil market sentiment. Financial traders have accumulated bullish long positions betting on a further rise in prices amounting to almost 1.2 billion barrels of oil. Meanwhile, the number of short positions in the six most important petroleum futures and options contracts has fallen to the lowest level since before 2013, creating a near-record imbalance between bullish and bearish positions in financial crude markets.

Gold – XAU

Gold on Thursday made its intraday high of US$1206.68/oz and low of US$1195.88/oz. Gold down by 0.187% at US$1199.45/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 1207-1227 keeping stop loss closing above 1227, targeting 1194-1184-1172 and 1166-1159. Buy above 1194-1159 with risk below 1159, targeting 1191-1207-1214 and 1220-1227.

Silver - XAG

Silver on Thursday made its intraday high of US$14.75/oz and low of US$14.51/oz. Silver settled down by 0.205% at US$14.57/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 Thursday made an intra‐day high of US$76.34/bbl, intraday low of US$73.80/bbl and settled down by 2.00% to close at US$74.57/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 Thursday made an intraday low of US$1.1462/EUR, high of US$1.1592/EUR and settled the day down by 0.597% to close at US$1.1512/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 1.1460-1.1300 with risk below 1.1300, targeting 1.1500-1.1610-1.1690 and 1.1760-1.1800. Sell below 1.1500-1.1700 targeting 1.1460-1.1430 and 1.1380-1.1300 with stop-loss at daily closing above 1.1700.

GBP/USD

GBP/USD on Thursday made an intra‐day low of US$1.2921/GBP, high of US$1.3040/GBP and settled the day up by 0.641% to close at US$1.3018/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 Thursday made intra‐day low of JPY113.62/USD and made an intraday high of JPY114.54/USD and settled the day down by 0.584% at JPY113.86/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 114.50-116.50 with risk above 116.50 targeting 114.00-113.20-112.50 and 112.00-111.00. Long positions above 114.00-111.00 with targets of 114.70-115.50 and 116.00-116.50 with stop below 111.00.