Daily Market Lookup

• Asian stocks stepped back from near eight-month highs on Thursday and the dollar eased as European and U.S. central banks reinforced investor worries about the global economic outlook and trade protectionism. In a fresh escalation of trade tensions, U.S. President Donald Trump has threatened new tariffs on goods from the European Union even as the Sino-U.S. trade dispute remains unresolved. On Wednesday, the European Central Bank (ECB) kept its loose policy stance and warned that threats to global economic growth remained. The ECB has already pushed back its first post-crisis interest rate hike, and President Mario Draghi raised the prospect of more support for the struggling euro zone economy if its slowdown persisted. Minutes from a March 19-20 meeting of Federal Reserve policymakers showed they agreed to be patient about any changes to interest rate policy as they saw the U.S. economy weathering a global slowdown without a recession in the next few years. However, he added some encouraging economic signs were now emerging, helped by the “great retreat” on policy by global central banks, fiscal stimulus in China and progress in Sino-U.S. trade talks. In currencies, the British pound was slightly higher at $1.3099 after European leaders agreed to extend the deadline for UK to leave the union to the end of October, averting a potential crash out of the bloc on Friday with no divorce deal. Sterling has stayed in a triangle holding pattern between $1.2945 and $1.3380 during the past month or so.
• The dollar hovered near two-week lows on Thursday as Federal Reserve minutes reinforced its recent dovish policy tilt while the pound held steady after European leaders extended the deadline for Britain to leave the union. Currency markets are also awaiting key economic data from the world's second-largest economy with March Chinese trade figures due on Friday and first quarter gross domestic product due next week. The U.S. dollar lacked momentum, with its index against six other currencies hovering near a two-week low, as the minutes from the Fed's last meeting cemented its recent dovish policy stance with no change to rates expected this year. U.S. central bankers also debated possible policy moves the Fed could make after it ends its balance sheet reduction program by September, with some advocating purchases of U.S. Treasury securities at that point. The U.S. consumer price data released on Wednesday also painted a mixed picture, with annual core CPI inflation slipping to 2.0 percent in March, the smallest increase since February 2018. The greenback also gave up its earlier gains against the euro that were driven on Wednesday when European Central Bank President Mario Draghi underscored growing risks facing the euro zone economy. The ECB left its ultra-easy stance unchanged as expected and Draghi noted that economic data was weak. He also confirmed the ECB was considering if measures were needed to mitigate the impact on banks of its negative deposit rates as well as the pricing of new cheap two-year loans to banks. Sterling showed no reaction after the EU delayed the deadline for Brexit for the second time in less than a month, in line with market expectations that Britain will not crash out of the bloc on Friday without a deal. Still, the decision did little to boost clarity on exactly how, when, or even if at all, the UK will leave the EU, is keeping the pound in check. It barely moved after China's factory-gate inflation picked up for the first time in nine months in March, edging away from deflationary territory, in a fresh sign of a boost to economic activity from stimulus.
• Oil prices fell on Thursday, pressured as U.S. crude stockpiles surged to their highest levels in almost 17 months amid record production and as economic concerns cast doubt over growth in demand for fuel. U.S. crude inventories rose 7 million barrels to 456.6 million barrels in the last week, their highest since November 2017, the Energy Information Administration said on Wednesday. U.S. crude oil production remained at a record 12.2 million barrels per day (bpd), making the United States the world's biggest oil producer ahead of Russia and Saudi Arabia. There are also concerns that an economic slowdown will soon dent fuel consumption after the International Monetary Fund this week downgraded its global growth forecast to the lowest in a decade. Despite the surge in U.S. supply and the economic concerns, global oil markets remain tight amid supply cuts led by the OPEC, U.S. sanctions on oil exporters Iran and Venezuela, and escalating fighting in Libya. Beyond the short-term outlook for oil markets, a lot of attention is on the future of demand amid the rise of alternative fuels for transport. Current oil demand stands around 100 million bpd. Bernstein said it expected oil demand to peak around 2030, but added that "we expect a long plateau rather than a sharp decline" in consumption after that. Output cuts by the Organization of the Petroleum Exporting Countries and its allies have propelled crude’s 42 percent surge this year, with supply disruptions from Libya to Venezuela adding impetus. While the OPEC report points to a much tighter market in coming months, higher prices may incentivize more American shale production. U.S. crude stockpiles expanded by more than double what analysts had forecast to 456.6 million barrels, well above the five-year average, EIA data showed. This suggests American output, which held at a record 12.2 million barrels a day last week, may still add to a global glut. OPEC’s production -- at 30.022 million barrels a day -- is about 758,000 barrels a day below the average amount the group believes is needed during the second quarter. The plunge last month was amplified by the crisis in Venezuela and if output remains at current levels, global inventories will decline sharply this quarter and next, it said.

Gold – XAU

Gold on Wednesday made its intraday high of US$1310.52/oz and low of US$1300.88/oz. Gold up by 0.300% at US$1307.91/oz.

Technicals in Focus:

In daily charts, prices are above 100DMA (1283) and breakage below will call for 1254-1247. MACD is above zero line and histograms are decreasing trend and it will bring downward stance in the upcoming sessions. RSI is in neutral region and more upside is expected before it gets stretched. Stochastic Oscillator is in oversold territory and giving negative crossover to confirm bearish stance for intraday trade.

Trading Strategy: Buy on Dips

Based on the charts and explanations above; buy above 1300-1261 with risk below 1261, targeting 1309-1316 and 1325-1333. Sell below 1309-1335 keeping stop loss closing above 1335, targeting 1300-1294-1286 and 1276-1269.

Silver - XAG

Silver on Wednesday made its intraday high of US$15.28/oz and low of US$15.21/oz. Silver settled up by 0.250% at US$15.21/oz.

Technicals in Focus:

On daily charts, silver is sustaining below200DMA (15.12), breakage above will lead to 15.60. 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 oversold region and giving positive crossover to show upside move for the intraday trade.

Trading Strategy: Buy on Dips

Based on the charts and explanations above, buy above 15.00-14.00 targeting 15.30-15.60-15.90 and 16.40-17.00; stop breakage below 14.00. Sell below 15.30-17.00 with stop loss above 17.00; targeting 15.10-14.85-14.50 and 14.00.

Oil - WTI

Crude Oil on Wednesday made an intra‐day high of US$64.66/bbl, intraday low of US$63.97/bbl and settled up by 0.473% to close at US$64.44/bl.

Technicals in Focus:

On daily charts, oil is sustaining above its 100DMA i.e. 55.88 which is a resistance level and breakage above will call for 59.60. MACD is above zero line and histograms are in decreasing 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 64.50-66.20 with stop loss at 66.20; targeting 63.60-63.00-62.50 and 62.00-61.60. Buy above 63.60-61.60 with risk daily closing below 61.60 and targeting 64.50-65.00 and 65.60-66.20.

EUR/USD

EUR/USD on Wednesday made an intraday low of US$1.1229/EUR, high of US$1.1287/EUR and settled the day up by 0.106% to close at US$1.1272/EUR.

Technicals in Focus:

On daily charts, prices are sustaining below 100DMA (1.1364), which become immediate resistance level, break above will target 1.1560-1.1600. 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 in neutral region and giving no directions to consider.

Trading Strategy: Neutral to Buy

On daily charts, prices are sustaining below 100DMA (1.1364), which become immediate resistance level, break above will target 1.1560-1.1600. 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 in neutral region and giving no directions to consider.

GBP/USD

GBP/USD on Wednesday made an intra‐day low of US$1.3041/GBP, high of US$1.3119/GBP and settled the day up by 0.300% to close at US$1.3085/GBP.

Technicals in Focus:

On daily charts, prices are sustaining above 200DMA (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 approaching 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 Sell

Based on the charts and explanations above; sell below 1.3100-1.3300 with targets at 1.3050-1.3010-1.2980 and 1.2900-1.2850 and stop should be below 1.3300. Buy above 1.3070-1.2850 with targets 1.3150-1.3200 and 1.3250-1.3300 with stop loss closing below 1.2850.

USD/JPY

USD/JPY on Tuesday made intra‐day low of JPY110.83/USD and made an intraday high of JPY111.27/USD and settled the day down by 0.300% at JPY110.99/USD.

Technicals in Focus:

In daily charts, JPY is sustaining above 50DMA (110.42), which is initial 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 in oversold territory and signaling to sell as it has given negative crossover to confirm bearish stance.

Trading Strategy: Neutral to Sell

Sell below 111.40-113.00 with risk above 113.00 targeting 111.00-110.60-110.10 and 109.55-109.05. Long positions above 111.00-107.75 with targets of 111.40-111.90 and 112.25-113.00 with stop below 107.50.