Daily Market Lookup

• Asian shares turned lower on Friday as trepidation ahead of the start of the U.S. corporate earnings season and underlying anxiety over the global growth outlook eclipsed some reassuring U.S. economic data. The tepid performance of Asian markets Friday followed a choppy session on Wall Street that left major indexes treading water, hemmed in by anxiety ahead of corporate earnings and worries about a global economic slowdown, which capped gains stemming from upbeat U.S. economic data. Tempering expectations for a sharp slowdown in U.S. growth as data that showed the number of Americans filing applications for unemployment benefits dropped to a 49-1/2-year low last week Comments from U.S. Federal Reserve Vice Chairman Richard Clarida that the U.S. economy is in a “good place” but reemphasising the Fed’s patience on rate hikes, also helped to reassure investors. International Monetary Fund Managing Director Christine Lagarde said on Thursday that the six-month delay of Britain’s exit from the European Union avoids the “terrible outcome” of a “no-deal” Brexit, but does nothing to lift uncertainty over the final outcome. Underscoring ongoing threats to the health of the global economy, IMF Deputy Managing Director Mitsuhiro Furusawa warned that a bigger-than-expected slowdown in China’s economy remains a key risk to global growth.
• The euro rose to a 2-1/2-week high on Friday, as dealers said speculators anticipated increased demand for the common currency arising from a Japanese bank's plans to purchase the multi-billion dollar aviation finance business from a German bank. Dealers said speculators were buying the euro in response to reports on Mitsubishi UFJ Financial Group's planned purchase of the aviation financing business of Germany's DZ Bank. As of June last year, that business stood at 5.6 billion euros. This week both France and Italy reported higher than expected industrial output in February, offering positive signs for the bloc after some downbeat data. Data released on Thursday showed first-time filings for U.S. jobless benefits dropped to a 49-1/2-year low last week, pointing to sustained labor market strength. Overall producer prices increased 0.6 percent in March, the largest rise since October. The dollar had sagged on Wednesday after a mixed report on domestic consumer prices reinforced the notion that underlying U.S. inflation remains tame. With the dollar broadly lower, the pound rose 0.2 percent to $1.3078 to cancel out most of the previous day's losses. Volatility for sterling plunged after a midweek deal at an emergency European Union summit to postpone Britain's exit from the bloc to Oct. 31. The deal meant Britain would not crash out this week without a treaty. The Labor Department reported on Thursday that its core producer price index (PPI) for final demand increased 0.3% last month, above economists' forecasts for a 0.2% increase. In the 12 months through March, the core PPI rose 2.4%. It also reported that initial jobless claims dropped by 8,000 to a seasonally adjusted 196,000 for the week ended April 7, confounding expectations for a rise. "Many market players had taken a bearish view on the dollar after the U.S. CPI numbers released earlier in the week, but they were forced to abruptly cover short positions as Thursday's data proved to be strong," said Takuya Kanda, general manager at Gaitame.Com Research Institute, in a Reuters report. "The rise thus lacked conviction and it remains to be seen if the dollar can sustain its bounce. The prospect of a rate cut by the Fed may have diminished in light of the data, but economic views are not yet strong enough to support rate hike expectations," Kanda said. The minutes of the Federal Reserve’s last policy meeting, released Wednesday, said various Fed officials thought that the appropriate level for rates could “shift in either direction”. Earlier this year, the Fed said that the next move in U.S. interest rates may be down rather than up.
• Oil prices gained on Friday in Asia as the International Energy Agency’s (IEA) month report said there are signs of tightening supply. Supply has been tightened thanks to OPEC-led production curbs and U.S. sanctions on Iran and Venezuela, the IEA said, OPEC’s supply cuts and U.S. sanctions against Iran and Venezuela have helped pushing up oil prices by more than a third so far in 2019. Venezuela pumped 960,000 bpd in March, a drop of almost 500,000 bpd from February, OPEC's April report on Wednesday said. OPEC and other non-member producers have been reducing output by 1.2 million bpd since the beginning of the year. The producers are due to meet on June 25-26 to decide whether to extend the pact. However, the IEA also warned that the demand side is also a “very important” piece of the equation for oil market rebalancing, and it was facing a wall of uncertainty given the outlook for global growth. Oil prices edged higher on Friday, lifted by ongoing supply cuts led by producer club OPEC and by U.S. sanctions on petroleum exporters Iran and Venezuela. Oil markets have been pushed up by more than a third this year by supply cuts led by the Organization of the Petroleum Exporting Countries (OPEC), U.S. sanctions on oil exporters Iran and Venezuela, and an escalating conflict in Libya. Production in Venezuela has been plunging as the U.S. sanctions add to a deep economic and political crisis, while the U.S. government is expected to tighten oil sanctions against Iran in May. OPEC and its allies will meet in June to decide whether to continue withholding supply, and while OPEC's de-facto leader, Saudi Arabia, is seen to be keen to continue cutting, sources within the group said it may raise output from July if disruptions elsewhere continue. China's economic growth is expected to slow to a near 30-year low of 6.2 percent this year, a Reuters poll showed on Friday, as sluggish demand at home and abroad weigh on activity despite a flurry of support measures.

Gold – XAU

Gold on Thursday made its intraday high of US$1309.12/oz and low of US$1289.60/oz. Gold down by 1.175% at US$1292.51/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 1284-1261 with risk below 1261, targeting 1294-1300-1309 and 1316-1325. Sell below 1294-1335 keeping stop loss closing above 1335, targeting 1286-1276 and 1269-1261.

Silver - XAG

Silver on Thursday made its intraday high of US$15.23/oz and low of US$14.88/oz. Silver settled down by 1.521% at US$14.95/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 14.90-14.00 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 Thursday made an intra‐day high of US$64.48/bbl, intraday low of US$63.35/bbl and settled down by 1.139% to close at US$63.74/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 64.20-66.20 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 Thursday made an intraday low of US$1.1249/EUR, high of US$1.1286/EUR and settled the day down by 0.186% to close at US$1.1251/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

Buy above 1.1260-1.1150 with risk below 1.1100, targeting 1.1305-1.1330 and 1.1350-1.1380. Sell below 1.1270-1.1400 targeting 1.1250-1.1200 and 1.1175-1.1150 with stop-loss at daily closing above 1.1400.

GBP/USD

GBP/USD on Thursday made an intra‐day low of US$1.3049/GBP, high of US$1.3108/GBP and settled the day down by 0.259% to close at US$1.3051/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 Thursday made intra‐day low of JPY110.89/USD and made an intraday high of JPY111.69/USD and settled the day up by 0.585% at JPY111.64/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.