Daily Market Lookup

• World equity markets slipped on Thursday amid worries on global growth and as investors digested European earnings, while the Swedish crown slumped to its lowest in 17 years and the euro suffered after German data. Asian markets had fallen earlier in the day, losing 0.5 percent as South Korea’s economy unexpectedly contracted in the first quarter, giving a sharp reminder of the fragility of the world economy beyond the United States. Shanghai’s bourse also fell sharply late in the day, losing more than 2 percent as other Chinese markets lost ground after attempts by the central bank to temper expectations for further easing of monetary policy. Chinese officials also warned of protracted pressure on economic growth, casting a shadow over hopes for a sustained recovery in the world’s second biggest economy Those worries on growth also played out closer to home for European investors, with fears lingering over the state of the German economy after a survey on Wednesday showed German business morale falling. Amid that weakness, central banks across the world have maintained ultra-loose monetary policy. The Bank of Japan on Thursday pledged to keep interest rates very low at least until early 2020, even as it retained main policy targets. There were signs of growing strength in the U.S. dollar, which analysts said was partly a symptom of the world’s largest economy maintaining relative strength and others, such as China, faring worse. The Swedish crown slumped to its lowest since August 2002, after the central bank said weak inflationary pressures meant a forecast rate hike would come slighter later than planned, holding benchmark borrowing costs unchanged. The euro suffered its worst day in over six weeks, falling 0.6 percent to a 22-month following the further signs of flagging growth in Germany. It was last at $1.1141. Also on the agenda for the single currency were Spanish elections on Sunday and economic concerns out of Italy.
• The dollar has come off Wednesday’s highs in early trade in Europe on Thursday, but is still well bid on the back of news flow suggesting the U.S. economy remains a pillar of relative strength. The dollar index, which measures the greenback against a basket of six major currencies, surged to its highest since May 2017 overnight after the Bank of Japan joined its counterpart in Canada in talking down the economic outlook. The BoJ said it would hold off from any interest rate increases for at least another year, sending the dollar briefly to a new 2019 high of 112.38 yen, although it has since retreated to 111.78, failing yet again to make a sustained break through the 112 level. The dollar also hit a three-month high of $1.3509 against the Canadian dollar Wednesday, when the Bank of Canada cut its growth forecast for this year to 1.2% from 1.7%, and dropped language about the possible need for future interest rate hikes from its policy statement. Meanwhile, the drumbeat of weak economic news from elsewhere across the globe continues. The South Korean won fell to its lowest in over two years against the dollar after data showed the economy contracted by 0.3% in the first quarter, while the Indian rupee has fallen to just above 70 against the dollar on fears that the sharp rise in oil prices this week will hit its current account. India is one of the world’s largest oil importers. The dollar’s rally may still be tempered by disappointments from the ongoing corporate earnings season, although results so far have generally outperformed expectations. That leaves Friday’s U.S. GDP report as the next likely big trigger for the greenback.
• Gold prices fell on Thursday in Asia despite weak data from South Korea and Germany. South Korea’s GDP shrank the most in a decade in the first quarter of 2019, data showed on Thursday morning. Exports, which account for about half of Korea’s GDP, were weaker than expected amid slackening demand from China, the nation’s biggest market. Meanwhile, in Europe, German business sentiment unexpectedly fell in April. Despite the weak data, prices of the safe-haven gold fell today. A wave of better-than-expected earnings results from U.S.-listed companies this week and strong U.S. housing data were cited as putting pressure on the precious metal. Looking ahead, traders will now shift their focus towards upcoming U.S. GDP data, which is due on Friday.
• Brent crude oil on Thursday rose above $75 per barrel for the first time in 2019 in the wake of tightening sanctions on Iran, while gains in U.S. prices were crimped by a surge in U.S. supply. Traders said Brent was receiving support on Thursday from a halt of Russian oil exports to Poland and Germany via a pipeline due to quality concerns. The United States this week said it would end all exemptions for sanctions against Iran, demanding countries halt oil imports from Tehran from May or face punitive action from Washington. The U.S. decision to try and bring down Iran oil exports to zero comes amid supply cuts led by producer OPEC since the start of the year aimed at propping up prices. As a result, Brent prices have risen by almost 40 percent since January. Still, Brian Hook, U.S. Special Representative for Iran and Senior Policy Advisor to the Secretary of State, said on Thursday "there is plenty of supply in the market to ease that transition and maintain stable prices.South Korea's economy unexpectedly shrank in the first quarter, the Bank of Korea said on Thursday, marking its worst performance since the global financial crisis. China's Premier Li Keqiang said on Wednesday that his nation's economy "still faces downward pressure". On the supply side, U.S. crude oil production has risen by more than 2 mn bpd since early 2018 to a record of 12.2mn bpd currently, making the United States the world's biggest oil producer ahead of Russia and Saudi Arabia In part because of soaring domestic production, U.S. commercial crude oil inventories last week hit a October 2017 high of 460.63 million barrels, the Energy Information Administration said on Wednesday. That was a rise of 1.3 million barrels.

Gold – XAU

Gold on Wednesday made its intraday high of US$1278.48/oz and low of US$1268.70/oz. Gold up by 0.255% at US$1275.49/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 1269-1244 with risk below 1244, targeting 1276-1284-1294 and 1300-1309. Sell below 1276-1309 keeping stop loss closing above 1310, targeting 1269-1261 and 1251-1244.

Silver - XAG

Silver on Wednesday made its intraday high of US$14.97/oz and low of US$14.77/oz. Silver settled up by 0.823% at US$14.92/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 negative crossover to show downside 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 Wednesday made an intra‐day high of US$66.38/bbl, intraday low of US$65.65/bbl and settled down by 0.582% to close at US$65.73/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 oversold 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 66.00-68.50 with stop loss at 68.50; targeting 65.60-65.00-64.20 and 63.60-63.00. Buy above 65.60-63.00 with risk daily closing below 63.00 and targeting 66.00-66.50-67.00 and 67.60-68.50.

EUR/USD

EUR/USD on Wednesday made an intraday low of US$1.1140/EUR, high of US$1.1161/EUR and settled the day down by 0.650% to close at US$1.1152/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 oversold 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 1.1140-1.1330 with risk below 1.1330, targeting 1.1150-1.1200 and 1.1280-1.1305-1.1350. Sell below 1.1150-1.1330 targeting 1.1140- 1.1100 and 1.1070-1.1020 with stop-loss at daily closing above 1.1020.

GBP/USD

GBP/USD on Wednesday made an intra‐day low of US$1.2886/GBP, high of US$1.2962/GBP and settled the day down by 0.269% to close at US$1.2899/GBP.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.

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 1.2900-1.3200 with targets at 1.2850-1.2800 and 1.2770-1.2700 and stop should be below 1.3300. Buy above 1.2850-1.2700 with targets 1.2900-1.2970-1.3010 and 1.3060-1.3100 with stop loss closing below 1.2800.

USD/JPY

USD/JPY on Wednesday made intra‐day low of JPY111.67/USD and made an intraday high of JPY112.39/USD and settled the day down by 0.296% at JPY112.18/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 111.50-113.00 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.