Daily Market Lookup

• Asian shares slipped on Friday as trade tensions continued to hurt sentiment, while weak corporate earnings in Europe added to worries about global growth and outweighed hopes for progress in Brexit negotiations. With U.S. markets closed overnight for Thanksgiving and Japan on holiday on Friday, trading activity was muted. Regional indicators turned lower after China's markets opened. China's markets have been stuck in a slump as the country's trade war with the U.S. has exacerbated worries about slowing growth. Few analysts expect sustained improvement for Chinese shares even if U.S. and Chinese leaders make progress in mending ties at a G20 meeting in Argentina at the end of the month. At this stage, some economists doubt the G20 talks will bring progress. On Thursday, stock markets in Europe were hit by disappointing earnings on further signs that corporate profit growth is peaking globally. Those earnings underscored the lingering anxiety among equity investors as trade tensions, slowing global investment and growth kept stock markets on the back foot after a torrid October. A draft deal between Britain and the European Union on future relations reached late Thursday did little to lighten the mood. In the currency market, the pound was flat, buying $1.2878 after rising more than 1 percent on Thursday on news of the draft agreement between Britain and the EU, which describes a close post-Brexit relationship. The agreement follows a draft treaty last week that set the terms for Britain's departure from the EU in March. But the deal faces a rocky ride once it reaches a deeply divided British parliament containing hardline eurosceptic and staunch pro-EU factions, and various shades of gray in-between.
• The British Pound steadied on Friday in Asia after the U.K. and the European Commission reportedly agreed on a draft political declaration that pledges an “ambitious, broad, deep and flexible partnership.” The euro and sterling edged higher against the dollar on Friday after Britain and the European Union agreed a draft text setting out their future relationship before a summit on Sunday. Traders were cautiously optimistic about the draft declaration agreed by the United Kingdom and the European Commission which outlined how the trading relationship, security and other matters will work once the divorce is finalised. Traders are still waiting for more clarity around the Brexit deal as it faces a rocky ride once it reaches a deeply divided British parliament, with hardline eurosceptic and staunch pro-EU factions, and various shades of gray in-between. He said the market is still positioned with a short bias in the pound, so there is scope for a move of 5-10 percent if a breakthrough deal is achieved. The Fed is expected to deliver its fourth rate hike of 2018 in December, but markets are trying to gauge how much tighter can policy get next year without risking a slowdown in the domestic economy, which has so far held up well even as borrowing costs have risen. While the Fed is on a monetary tightening path, the Bank of Japan remains committed to its ultra loose monetary policy due to low growth and inflation. This interest rate differential between U.S. and Japanese bonds makes the dollar a more attractive bet than the yen. According to some analysts, another factor supporting the dollar/yen is that Japanese investors remain heavily invested in U.S. and foreign assets.
• Oil prices remained weak on Friday morning trading in Asia amidst market concerns over a global oil glut coupled with softer. Saudi Arabia has pledged to cool market anxiety and is pushing oil output cuts within the Organization of the Petroleum Exporting Countries (OPEC) and the wider grouping known as OPEC+, which includes 24 oil producers. Saudi Arabia’s Energy Minister Khalid al-Falih said on Thursday that in view of the soft demand for January oil, the kingdom will respond accordingly, according to Reuters. Part of the problem is that the U.S. has given out multiple waivers to sanctions it imposed on Iran. Those waivers mean that plenty of Iranian oil will continue to flow into the market. The kingdom is considering slashing oil production by up to 1.4 million barrels per day (bpd) with OPEC members and their allies that make up OPEC+. The oil producers are set to meet in Vienna, Austria, on Dec. 6 for an output decision for the next six months. His comments came after U.S. President Donald Trump thanked Saudi Arabia on Twitter on Wednesday for lowering oil prices. Meanwhile, JP Morgan lowered its prediction for Brent crude prices for next year from $83.5 a barrel to $73 and to $64 in 2020 based on a surge in North American supply in the second half of 2019. JP Morgan’s Head of Asia-Pacific Oil and Gas Scott Darling told CNBC on Thursday. Elsewhere, Russia has an even gloomier outlook regarding oil prices. Russian news agency Tass quoted the country’s Economic Development Minister Maksim Oreshkin, who expects oil prices to drop to $50 a barrel by 2025 to 2030 and stay at that level for a long time.

Gold – XAU

Gold on Thursday made its intraday high of US$1229.03/oz and low of US$1224.79/oz. Gold up by 0.124% at US$1227.17/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 1230-1260 keeping stop loss closing above 1260, targeting 1221-1214-1200 and 1195-1189. Buy above 1221-1180 with risk below 1180, targeting 1230-1238-1244 and 1250-1260.

Silver - XAG

Silver on Thursday made its intraday high of US$14.54/oz and low of US$14.43/oz. Silver settled up by 0.0691% at US$14.47/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 14.00-12.40 targeting 14.30-14.90-15.10 and 15.60-16.35; stop breakage below 12.40. Sell below 14.30-17.00 with stop loss above 17.00; targeting 13.90-13.50 and 13.00-12.40.

Oil - WTI

Crude Oil on Thursday made an intra‐day high of US$55.83/bbl, intraday low of US$53.54/bbl and settled down by 1.116% to close at US$54.03/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 54.05-58.50 with stop loss at 58.50; targeting 53.40-52.80 and 52.00-51.40. Buy above 53.30-51.50 with risk daily closing below 51.50 and targeting 54.05-55.00-56.00 and 57.00-57.80.

EUR/USD

EUR/USD on Thursday made an intraday low of US$1.1378/EUR, high of US$1.1433/EUR and settled the day up by 0.175% to close at US$1.1399/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 1.1350-1.1160 with risk below 1.1160, targeting 1.1430-1.1490 and 1.1540-1.1610. Sell below 1.1430-1.1620 targeting 1.1350-1.1300-1.1260 and 1.1160-1.1100 with stop-loss at daily closing above 1.1620.

GBP/USD

GBP/USD on Thursday made an intra‐day low of US$1.2763/GBP, high of US$1.2927/GBP and settled the day up by 0.790% to close at US$1.2875/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 1.2855-1.3000 with targets at 1.2780-1.2700 and 2660-1.2600. Buy above 1.2780-1.2600 with targets 1.2880-1.2845-1.2900 and 1.3000-1.3050 with stop loss closing below 1.2600.

USD/JPY

USD/JPY on Thursday made intra‐day low of JPY112.87/USD and made an intraday high of JPY113.20/USD and settled the day down by 0.106% at JPY112.92/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.