Daily Market Lookup

• Asian shares and U.S. stock futures skidded on Monday after a shock contraction in Chinese exports pointed to deepening cracks in the world’s second-biggest economy and raised fears of a sharper slowdown in global growth and corporate profits. Latest data from China showed imports fell 7.6 percent year-on-year in December when analysts had predicted a 5 percent rise while exports unexpectedly dropped 4.4 percent, confounding expectations for a 3 percent gain. The disappointing numbers reinforced fears U.S. tariffs on Chinese goods were starting to take a heavy toll on China’s cooling economy. Softening demand in China is already being felt around the world, with slowing sales of goods ranging from iPhones to automobiles, prompting profit warnings from the likes of Apple and Jaguar Land Rover. Liquidity was generally light during Asian hours as Japan was on public holiday. Chinese shares were in the red, with the blue-chip index .CSI300 down 0.7 percent. Hong Kong's Hang Seng index .HSI stumbled 1.5 percent while Australian shares reversed early gains to end mostly flat. Some analysts expect Monday’s trade data to provide impetus to Chinese authorities to resolve the trade dispute with Washington. The world’s two largest economies have been in talks for months now to try and resolve their bitter trade war, with no signs so far of any substantial progress in negotiations. Expectations are dour with profits for U.S. companies forecast to rise 6.4 percent, down from an Oct. 1 estimate of 10.2 percent and a big drop from 2018’s tax cut-fueled gain of more than 20 percent. Investor attention was also on the U.S. government shutdown, now in its 24th day, and with no resolution in sight. Further clouding the outlook, Britain faces a hugely uncertain path with a vote for a deal for its exit from the European Union due in the U.K. parliament on Tuesday. All these factors were at play last week when the main U.S. indices ended Friday little changed as investors reset positions ahead of key risk events. China’s politically-sensitive surplus with the U.S. rose 17.2 percent to $323.32 billion last year, the highest on record going back to 2006, according to Reuters calculations based on customs data. That compared with about $275.81 billion in 2017 China’s large trade surplus with the United States has long been a sore point with Washington, which has demanded Beijing should take steps to reduce it Washington imposed import tariffs on hundreds of billions of dollars of Chinese goods last year and has threatened further action if Beijing does not change its practices on issues ranging from industrial subsidies to intellectual property. China has retaliated with tariffs of its own.
• The dollar rose against most of its peers on Monday, although heightened investor expectations that the Federal Reserve will not raise rates this year are most likely to cap the greenback's gains. Both currencies had gained around 1.5 percent versus the dollar last week as risk sentiment improved on hopes for both a U.S.-Sino trade deal and more aggressive stimulus from Chinese policymakers to support its ailing economy. The dollar fell 1.5 percent versus the offshore yuan last week, its steepest weekly decline since January 2017 as investors' fears of a sharp slowdown in the world's second largest economy somewhat abated. U.S. central bank hiking rates four times, investors now expect the Fed to halt its monetary tightening policy. Market participants think that worries of slowing domestic and global growth as well as tame U.S. inflation will make Fed policymakers hesitant to raise borrowing costs in the world's largest economy. Fed Chairman Jerome Powell reiterated last week that the U.S. central bank has the ability to be patient on monetary policy given that inflation remains stable Data on Friday showed that U.S. consumer prices in December fell for the first time in nine months in December. Prime Minister Theresa May must win a vote in parliament on Tuesday to get her Brexit deal approved or risk a chaotic exit for Britain from the European Union. The numbers are not in May's favor and her chances of winning the vote look extremely slim.
• Oil prices fell 1% on Monday in Asia after China reported weakening imports and exports in the world's second-largest crude oil consumer. Oil Futures recorded their biggest weekly gain in six months last week thanks to data showing output declines among major oil producers and a weekly fall in U.S. crude inventories. Optimism surrounding a possible resolution to the U.S.-China trade dispute also contributed to gains. For the week, the U.S. benchmark rose about 7.6%, its biggest weekly gain since June. It rallied about 6% for the week. Saudi Arabia-led OPEC and its non-member allies led by Russia agreed to collectively cut production by a total of 1.2 million barrels per day (bpd) during the first six months of 2019 in an effort to stave off a global glut in supplies. Baker Hughes reported Friday that the number of domestic rigs drilling for oil fell by 4 to 873 in the week to Jan. 4. It was the second straight weekly decline in the rig count, suggesting a slowdown in crude production.

Gold – XAU

Gold on Friday made its intraday high of US$1295.08/oz and low of US$1286.35/oz. Gold up by 0.087% at US$1287.47/oz.

Technicals in Focus:

In daily charts, prices are above 200DMA (1251) and breakage below will call for 1246-1236. MACD is above zero line and histograms are increasing trend and it will bring upward stance in the upcoming sessions. RSI is in overbought region and more upside 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: Buy on Dips

Based on the charts and explanations above; buy above 1289-1260 with risk below 1260, targeting 1300-1309 and 1315-1324. Sell below 1300-1324 keeping stop loss closing above 1324, targeting 1289-1284-1274 and 1266-1260.

Silver - XAG

Silver on Friday made its intraday high of US$15.72/oz and low of US$15.54/oz. Silver settled up by 0.192% at US$15.58/oz.

Technicals in Focus:

On daily charts, silver is sustaining above100DMA (14.50), breakage below will lead to 14.30-13.60. 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 15.40-14.75 targeting 15.60-15.80-16.00 and 16.40-16.80.; stop breakage below 14.75. Sell below 15.60-17.00 with stop loss above 17.00; targeting 15.40-15.10-14.90 and 14.75 14.40.

Oil - WTI

Crude Oil on Friday made an intra‐day high of US$53.53/bbl, intraday low of US$51.39/bbl and settled down by 1.104% to close at US$51.94/bbl.

Technicals in Focus:

On daily charts, oil is sustaining below its 50DMA i.e. 66.10 which is a resistance level and breakage above will call for 66.80-67.08. 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 51.70-54.00 with stop loss at 54.00; targeting 51.00-50.20 and 49.50-49.00. Buy above 52.50-49.00 with risk daily closing below 49.00 and targeting 53.00-53.50 and 54.00-54.60.

EUR/USD

EUR/USD on Friday made an intraday low of US$1.1457/EUR, high of US$1.1539/EUR and settled the day down by 0.279% to close at US$1.1467/EUR.

Technicals in Focus:

On daily charts, prices are sustaining above 100DMA (1.1475), which become immediate resistance level, break below will target 1.1560-1.1600. MACD is below zero line but histograms are increasing mode which will bring bullish view. Stochastic is in neutral 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 1.1460-1.1340 with risk below 1.1340, targeting 1.1490-1.1560-1.1620 and 1.1660-1.1700. Sell below 1.1490-1.1700 targeting 1.1460-1.1420-1.1390 and 1.1345-1.1300 with stop-loss at daily closing above 1.1700.

GBP/USD

GBP/USD on Monday made an intra‐day low of US$1.2708/GBP, high of US$1.2865/GBP and settled the day down by 0.768% to close at US$1.2842/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 1.2850-1.3010 with targets at 1.2800-1.2700-1.2750 and 1.2660-1.2600. Buy above 1.2800-1.2600 with targets 1.2850-1.2900 and 1.2940-1.3010 with stop loss closing below 1.2550.

USD/JPY

USD/JPY on Friday made intra‐day low of JPY108.13/USD and made an intraday high of JPY108.59/USD and settled the day up by 0.0461% at JPY108.47/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 108.50-111.00 with risk above 111.00 targeting 108.10-107.70 and 107.05-106.60. Long positions above 108.10-106.60 with targets of 108.50-109.10-109.60 and 110.20-111.00 with stop below 107.00.