Daily Market Lookup

• Asian stocks pulled back from a one-month high on Friday as the Federal Reserve appeared Asian shares drifted lower on Monday as signs of softening demand in China rekindled anxiety about the outlook for world growth, but Saudi Arabia's plans to cut production helped to halt a slide in oil prices. Kevin Lai, chief economist for Asia ex-Japan at Daiwa Capital Markets, said there were genuine concerns from an equity market perspective about China's economic growth in general and its significant debt burden in particular. Its sales outlook has weakened amid rising trade tensions between China and the United States that have taken a bite out of China's economy. A spike in U.S. bond yields, driven by the Federal Reserve's commitment to keep raising borrowing costs, has also shaken emerging markets as investors poured money into U.S. dollar assets. The Fed's stance disappointed some investors who had hoped that October's rout in equities might have prompted policy makers to take a more cautious approach on interest rates. Sterling has been under pressure over the past few weeks as investors worried over whether an orderly Brexit deal would be achieved. With less than five months before Britain is due to leave the EU on March 29, negotiations are still stuck over a backup plan for the land border between British-ruled Northern Ireland and EU member Ireland, should they fail to clinch a long-term deal. Four British ministers who back remaining in the European Union are on the verge of quitting Theresa May's government over Brexit, the Sunday Times reported, adding to the political uncertainty.
• The dollar built on last week's gains and rose toward a 16-month high on Monday as traders expect the U.S. Federal Reserve to keep tightening monetary policy, but sterling remained under heavy pressure amid uncertainty over a Brexit deal. The Fed has reaffirmed its plan to raise interest rates by 25 basis points in December, followed by two more potential rate hikes by mid-2019 on the back of an upbeat economy and rising wage pressures. The greenback has also benefited from a broader move away from riskier assets due to U.S.-Sino trade tensions, China's economic slowdown, Brexit uncertainty, and the standoff between Rome and the European Union over Italy's plan for a big-spending budget and wide fiscal deficit. While the Fed is on track to raise interest rates, the BOJ is expected to keep its monetary policy ultra-loose in the face of slow growth and inflation. The widening interest rate differential between U.S. and Japanese bonds has made the dollar a more attractive bet than the yen, which is often used as a funding currency for carry trades. The European Commission rejected Italy's 2019 budget last month, saying it flouted a previous commitment to lower the country's deficit. The EU gave Rome until Tuesday to present a revised version of the budget. The EU also cut its forecasts for Italian growth last week, adding to investor concerns over Italy's debts and economic outlook. A speech by Federal Reserve Chairman Jerome Powell in Dallas on Wednesday will also generate some focus, as he will likely discuss national and global economic issues, as well as appearances by a handful of other Fed speakers, including Vice Chair Randal Quarles.
• Oil prices gained more than 1% on Monday following reports that Saudi Arabia announced plans to reduce oil supply for December. Saudi energy minister Khalid al-Falih said on Sunday that it would cut oil supply by 0.5 million barrels per day in December due to seasonally lower demand. The cut represents a reduction in global oil supply of about 0.5%, according to reports Global oil prices are down by around 20% since early October, buffeted by signs of growing output from key producers, mainly the U.S., Saudi Arabia and Russia, and indications of a global economic slowdown. Sanctions on Iran are unlikely to cut as much oil out of the market as initially expected as Washington has granted exemptions to Iran's biggest buyers which will allow them to continue buying limited amounts of crude for at least another six months. Russian Energy Minister Alexander Novak said on Sunday that "There is a lot of volatility in the market” and that “this volatility could remain.” “Right now we shouldn't be making any hasty decisions. We need to look at the situation very carefully to see how it will develop so that we don't end up changing our course by 180 degrees every month,” he said. In other news, Baker Hughes energy services firm reported on Friday that U.S. energy firms last week added 12 oil rigs in the week to Nov. 9, bringing the total count to 886, the highest level since March 2015. Saudi Arabia plans to reduce oil supply to world markets by 0.5 mn bpd in December, its energy minister said on Sunday, as the OPEC power faces uncertain prospects in getting other producers to agree to a coordinated output cut. Khalid al-Falih told reporters that Saudi Aramco’s customer nominations would fall by 500K bpd in December versus November due to seasonal lower demand. The cut represents a reduction in global oil supply of about 0.5%. Saudi Arabia is the de facto leader of the OPEC.

Gold – XAU

Gold on Friday made its intraday high of US$1223.48/oz and low of US$1206.62/oz. Gold down by 1.109% at US$1209.64/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 1238-1266 keeping stop loss closing above 1266, targeting 1230-1221-1214 and 1207-1200. Buy above 1230-1194 with risk below 1194, targeting 1238-1244 and 1250-1256.

Silver - XAG

Silver on Friday made its intraday high of US$14.42/oz and low of US$14.09/oz. Silver settled down by 1.94% at US$14.14/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 14.35-12.40 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.

Oil - WTI

Crude Oil on Friday made an intra‐day high of US$60.90/bbl, intraday low of US$59.42/bbl and settled down by 1.527% to close at US$59.95/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 61.00-66.30 with stop loss at 63.30; targeting 60.50-59.90 and 59.00-58.50-57.90. Buy above 60.50-57.90 with risk daily closing below 63.30 and targeting 61.00-61.50-62.05 and 63.30-63.80.

EUR/USD

EUR/USD on Friday made an intraday low of US$1.1315/EUR, high of US$1.1368/EUR and settled the day down by 0.228% to close at US$1.1335/EUR.

Technicals in Focus:

On daily charts, prices are sustaining below 100DMA (1.1621), 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 1.1300-1.1160 with risk below 1.1160, targeting 1.1340-1.1430-1.1490 and 1.1540-1.1610. Sell below 1.1340-1.1610 targeting 1.1300-1.1340-1.1300 and 1.2960-1.2900 with stop-loss at daily closing above 1.1610.

GBP/USD

GBP/USD on Friday made an intra‐day low of US$1.2957/GBP, high of US$1.3069/GBP and settled the day down by 0.689% to close at US$1.2969/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 1.2950-1.3100 with targets at 1.2900-1.2840 and 1.2780-1.2700. Buy above 1.2900-1.2700 with targets 1.2950-1.3000-1.3050 and 1.3100-1.3150 with stop loss closing below 1.2700.

USD/JPY

USD/JPY on Friday made intra‐day low of JPY113.63/USD and made an intraday high of JPY114.07/USD and settled the day down by 0.210% at JPY113.81/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 113.50-115.50 with risk above 115.50 targeting 113.00-112.00-111.50 and 111.20-110.70. Long positions above 113.00-110.70 with targets of 113.50-114.00 and 114.70-115.50 with stop below 110.50.