Daily Market Lookup

• Asian stocks rose modestly on Tuesday, gaining a firmer footing after a week of heavy losses, although increasing tensions between Saudi Arabia and the West have fanned geopolitical concerns and capped gains. People walk past an electronic board showing Japan's Nikkei average (top R) and Japanese yen's exchange rate against the U.S. dollar outside a brokerage in Tokyo, Japan, October 15, 2018. The disappearance in Turkey earlier this month of a Saudi journalist critical of Riyadh has provoked an international outcry against the oil-rich kingdom, which has rattled its financial markets. U.S. President Donald Trump has sent Secretary of State Mike Pompeo to Saudi Arabia over the case, potentially straining the relationship between the strategic allies. Data on Tuesday showed China’s factory-gate inflation cooled for a third straight month in September amid ebbing domestic demand, pointing to more pressure on the world’s second biggest economy as it remains locked in an intensifying trade war with the United States. Perceived safe havens such as the Japanese yen and Swiss franc have found supported following the hit riskier assets have taken. Currency market focus was on the U.S. Treasury’s semiannual currency report due later in the day, with investors waiting to see Washington’s view on China after media reports last week that the department has not labeled Beijing a currency manipulator.
• The U.S. dollar edged up on Tuesday after it was dented by weak U.S. retail sales data overnight, while New Zealand's currency gained on the back of stronger than expected inflation data. That data suggested consumers were reluctant to spend, and came as U.S. bond yields cooled off from its seven-year high last week. "The equity correction is not done... the dollar is behaving in an asymmetric manner - good news is not so good and bad news is much worse in terms of price action for the dollar," added Attrill. Both the yen and Swiss franc have attracted buyers amid tensions between the Western powers and Saudi Arabia, which has been under pressure since a prominent Saudi journalist Jamal Khashoggi, a critic of Riyadh and a U.S. resident, disappeared on Oct. 2 after visiting the Saudi consulate in Istanbul. An impasse over Brexit talks and global trade tensions have added to the cocktail of negative factors that battered global stocks. The sterling changed hands at 1.3144 as investors wait for more clarity over the post-Brexit status of Britain's land border with Ireland. Chancellor Angela Merkel's Bavarian sister party said on Monday it would back political stability in Berlin after suffering big losses in a regional election that their far-right foes hailed as "an earthquake" that would rock the coalition government. Government data showed consumer price inflation rose 0.9 percent in the September quarter, topping the 0.7 percent expected, due to rising petrol costs and a weakening currency.
• Oil prices rose on Tuesday on signs Iranian oil exports this month have fallen from September ahead of U.S. sanctions against Tehran that are set to start in November. Iran has exported 1.33 million bpd to countries including India, China and Turkey in the first two weeks of October, according to Refinitiv Eikon data. That was down from 1.6 million bpd in September, the data showed. The October exports are a sharp drop from the 2.5 million bpd exported in April before U.S. President Donald Trump withdrew from a multi-lateral nuclear deal with Iran in May and ordered the re-imposition of economic sanctions on the country, the third-largest producer among the members of the OPEC. The sanctions on Iran's petroleum sector will go into effect on Nov. 4. Crude prices have also been supported by geopolitical tensions caused by the disappearance of a Saudi Arabian journalist in Turkey. Turkish official have alleged Saudi Arabian intelligence officers killed the journalist Jamal Khashoggi on Oct. 2 at the Saudi consulate in Istanbul. U.S. President Donald Trump threatened "severe punishment" for the kingdom if the journalist is found to have been killed. Trump dispatched Secretary of State Mike Pompeo to Saudi Arabia to meet with the country's leader King Salman. Saudi Arabia, the world's largest oil exporter, has denied the allegation. Saudi Arabian officials said it would retaliate against any actions taken over the Khashoggi case. With the world's only sizable spare oil output capacity, Saudi Arabia is expected to export more to offset the loss of Iranian oil supply from the sanctions. Saudi Arabia's Energy Minister Khalid al-Falih said on Monday at a conference in New Delhi that the kingdom is committed to meeting India's rising oil demand and is the "shock absorber" for supply disruptions in the oil market. U.S. crude stockpiles were forecast to have risen for the fourth straight week by about 1.1 million barrels in the week ended Oct.12, according to a Reuters poll ahead of reports from the API and EIA. The API's data is due for publication at 4:30 p.m. EDT (2030 GMT) on Tuesday, and the EIA report is due at 10:30 a.m. EDT (1430 GMT) on Wednesday.

Gold – XAU

Gold on Monday made its intraday high of US$1233.20/oz and low of US$1216.80/oz. Gold up by 0.766% at US$1226.58/oz.

Technicals in Focus:

In daily charts, prices are below 100DMA (1228) and breakage above will call for 1240-1260. 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 overbought 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 1233-1254 keeping stop loss closing above 1254, targeting 1221-1214-12007 and 1200-1194. Buy above 1214-1194 with risk below 1194, targeting 1228-1238 and 1244-1250.

Silver - XAG

Silver on Monday made its intraday high of US$14.75/oz and low of US$14.57/oz. Silver settled up by 0.686% at US$14.67/oz.

Technicals in Focus:

On daily charts, silver is sustaining below 100DMA (15.45), breakage above will lead to16.05-16.30. 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 neutral 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 14.30-12.40 targeting 14.90-15.10 and 15.60-16.35; stop breakage below 12.40. Sell below 14.90-17.00 with stop loss above 17.00; targeting 14.40-13.90 and 13.50-13.00.Neutral

Oil - WTI

Crude Oil on Monday made an intra‐day high of US$72.50/bbl, intraday low of US$70.70/bbl and settled down by 0.334% to close at US$71.47/bbl.

Technicals in Focus:

On daily charts, oil is sustaining above its 50DMA i.e. 69.62 which is a support level 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 overbought region and giving negative crossover for confirmation of bearish 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 72.00-73.90 with stop loss at 73.90; targeting 71.40-70.50 and 70.10-69.60. Buy above 71.40-69.60 with risk daily closing below 69.60 and targeting 72.00-72.60 and 73.00-73.90.

EUR/USD

EUR/USD on Monday made an intraday low of US$1.1526/EUR, high of US$1.1605/EUR and settled the day up by 0.346% to close at US$1.1577/EUR.

Technicals in Focus:

On daily charts, prices are sustaining below 100DMA (1.1627), which become immediate resistance level, break below will target 1.1690-1.1730. MACD is below zero line but histograms are increasing mode which will bring bullish view. Stochastic is in overbought 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 sell.

Trading Strategy: Neutral to Buy

Buy above 1.1540-1.1300 with risk below 1.1300, targeting 1.1610-1.1690 and 1.1760-1.1800. Sell below 1.1610-1.1790 targeting 1.1540-1.1460-1.1430 and 1.1380-1.1300 with stop-loss at daily closing above 1.1700.

GBP/USD

GBP/USD on Monday made an intra‐day low of US$1.3079/GBP, high of US$1.3181/GBP and settled the day up by 0.504% to close at US$1.3150/GBP.

Technicals in Focus:

On daily charts, prices are sustaining above 100DMA (1.3096) 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 neutral territory and giving positive crossover to confirm bullish 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 1.3200-1.3450 with targets at 1.3140-1.3060-1.2990 and 1.2950-1.2890. Buy above 1.3200-1.2890 with targets 1.3250-1.3290 and 1.3350-1.3450 with stop loss closing below 1.2890.

USD/JPY

USD/JPY on Monday made intra‐day low of JPY111.61/USD and made an intraday high of JPY112.22/USD and settled the day down by 0.338% at JPY111.75/USD.

Technicals in Focus:

In daily charts, JPY is sustaining above 50DMA (111.82), which is major support 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 112.50-115.50 with risk above 115.50 targeting 112.00-111.50 and 111.20-110.70. Long positions above 112.00-111.00 with targets of 112.50-113.00-114.00 and 114.70-115.50 with stop below 111.00.