Daily Market Lookup

• Asian shares veered between small losses and gains on Friday as investors awaited key China trade and lending data and as worries over Sino-U.S. trade tensions countered optimism rooted in expectations of a Federal Reserve rate cut this month. Later on Friday, China will release June trade data, with analysts expecting exports to have fallen as weakening global demand and a sharp hike in U.S. tariffs took a heavier toll on the world’s largest trading nation. China is also due to release lending data on Friday, while second-quarter GDP figures are scheduled for Monday. The world’s second-largest economy is expected to have slowed to its weakest pace in at least 27 years, raising hopes for more stimuli to fend off a sharper slowdown. Underscoring the economic impact of global trade tensions, Singapore’s economy grew at its slowest pace in a decade in the second quarter as electronics manufacturing output declined for a sixth consecutive month in May, and as exports saw their biggest decline in more than three years. Amid the global slowdown, U.S. Federal Reserve Chairman Jerome Powell indicated on Thursday that a rate cut is likely at the Fed’s next meeting. But a tweet by U.S. President Donald Trump on Thursday in which he said that China was not living up to promises it made on buying agricultural products from American farmers threatened to revive worries over trade.
• The U.S. dollar extended losses made earlier this week on continued Fed-driven momentum. U.S. Federal Reserve chairman Jerome Powell said this week that the central bank will “act as appropriate” as policymakers consider "uncertainties" emanating from slowing investment, trade disputes and other issues affecting the global economy. At his second day of congressional testimony, Powell said the central bank has room to ease monetary policy as relationship between inflation and jobless rates diminished. Data from the Labor Department that showed an increase in inflation and lower-than-expected initial jobless claims failed to lift the dollar today. However, the data dampened financial market expectations of a more aggressive 50 basis point cut at the Fed's July 30-31 meeting. The dollar was steady on Friday, having regained some traction against its peers after stronger-than-expected U.S. inflation data tempered the prospect of an aggressive Federal Reserve interest rate cut later this month. The core U.S. consumer price index excluding food and energy components rose 0.3% in June, the largest increase since January 2018, data on Thursday showed. The signs of a pick-up in underlying inflation, along with separate data on weekly jobless claims showing the labor market remained solid, curbed financial market expectations of a more aggressive 50 basis point cut at the Fed's July 30-31 meeting. Markets are still fully priced for a quarter percentage point cut as U.S. policymakers seek to support a slowing economy. The index hit the low after Powell said in a midweek congressional testimony that the Fed was ready to "act as appropriate," given the U.S. economy was still under threat from disappointing factory activity, tame inflation and a simmering Sino-U.S. trade war. Comments by Chicago Fed President Charles Evans scheduled later on Friday and New York Fed President John Williams due on Monday will provide a chance to gauge how dovish the central bank really is, said Masafumi Yamamoto, chief forex strategist at Mizuho Securities. If these Fed officials are not as dovish as Powell, and if the New York Fed's manufacturing survey on Monday prove stronger than forecast, they could show that the dollar weakening in response to Powell's congressional testimony was overdone.
• Oil prices rose on Friday, hovering near six-week highs, as U.S. oil producers in the Gulf of Mexico cut more than half their output in the face of a tropical storm and as tensions continued to simmer in the Middle East. By Thursday, oil companies in the Gulf of Mexico had cut more than 1 million barrels per day (bpd) of output, or 53% of the region's production, due to Tropical Storm Barry which could make landfall Saturday on the Louisiana coast. The storm was forecast to become a category one hurricane with at least 74-mile-per hour (119 km-per-hour) winds. U.S. crude oil inventories have decreased for four consecutive weeks. Crude stocks fell 9.5 million barrels in the week to July 5, the Energy Information Administration (EIA) said, a drop that was more than triple the 3.1 million-barrel draw expected by analysts. Iran's alleged attempt to block a British-owned tanker heightened tensions in the Middle East in the wake of attacks on tankers and the downing of U.S. drone by Iran in June. But a lower 2020 oil demand outlook from the Organization of the Petroleum Exporting Countries kept price gains in check. OPEC said the world would need 29.27 million bpd of crude from its 14 members in 2020, down 1.34 million bpd this year. U.S. tight crude production is anticipated to continue to grow as new pipelines will allow more Permian crude to flow to the U.S. Gulf coast export hub. More than 2.5 million bpd of new pipeline capacity in the Permian is expected to become operational by July 2020," the report said, casting light on escalating output in U.S. shale production. Geopolitical tension in the Middle East is also providing support to the oil market. Earlier this week, Iran tried to seize a British tanker in Persian Gulf. The oil tanker was crossing into the Strait of Hormuz area when Iranian boats approached it and demanded that the tanker change course and stop in nearby Iranian territorial waters, CNN reported. Meanwhile, in its latest monthly report released Thursday, the Organization of the Petroleum Exporting Countries (OPEC) forecast global oil demand will rise by 1.14 million barrels per day (bpd) next year, matching the projection for 2019. But the cartel forecast acceleration in non-OPEC supply growth to an average of 2.44 million bpd in 2020, from an expected 2.05 million bpd this year.

Gold – XAU

Gold on Thursday made its intraday high of US$1418.75/oz and low of US$1400.81/oz. Gold down by 1.06% at US$1403.62/oz.

Technicals in Focus:

In daily charts, prices are above 100DMA (1303) and breakage below will call for 1296-1288. MACD is above zero line and histograms are decreasing trend and it will bring downward stance in the upcoming sessions. RSI is in overbought 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 1400-1374 with risk below 1374, targeting 1411-1425-1433 and 1440-1450. Sell below 1411-1450 keeping stop loss closing above 1450, targeting 1400-1388 and 1380-1374.

Silver - XAG

Silver on Thursday made its intraday high of US$15.30/oz and low of US$15.08/oz. Silver settled down by 0.657% at US$15.10/oz.

Technicals in Focus:

On daily charts, silver is sustaining below 200DMA (14.93), 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 15.25-13.90 targeting 15.60-15.90 and 16.20-16.50; stop breakage below 13.20. Sell below 15.35-16.90 with stop loss above 16.90; targeting 15.35-15.05-14.60 and 14.30-13.90.

Oil - WTI

Crude Oil on Thursday made an intra‐day high of US$60.96/bbl, intraday low of US$60.18/bbl and settled down by 0.107% to close at US$60.41/bbl.

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 61.00-63.30 with stop loss at 63.30; targeting 60.50-60.00-59.20 and 58.70-58.10. Buy above -60.50-58.10 with risk daily closing below 58.10 and targeting 61.00-61.90 and 62.50-63.30.

EUR/USD

EUR/USD on Thursday made an intraday low of US$1.1244/EUR, high of US$1.1285/EUR and settled the day up by 0.0355% to close at US$1.1253/EUR.

Technicals in Focus:

On daily charts, prices are sustaining below 200DMA (1.1349), which become immediate resistance level, break above will target 1.1320-1.1280. 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 1.1210-1.1120 with risk below 1.1120, targeting 1.1220-1.1280-1.1320 and 1.1390-1.1420. Sell below 1.1220-1.1390 targeting 1.1220-1.1180 and 1.1150-1.1120 with stop-loss at daily closing above 1.1400.

GBP/USD

GBP/USD on Thursday made an intra‐day low of US$1.2493/GBP, high of US$1.2570/GBP and settled the day up by 0.144% to close at US$1.2517/GBP.

Technicals in Focus:

On daily charts, prices are sustaining above 200DMA (1.2960) 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 oversold territory and giving positive crossover to confirm bearish 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 1.2550-1.12760 with targets at 1.2500-1.2440-1.2405 and 1.2350-1.2300 top should be below 1.2760. Buy above 1.2550-1.2300 with targets 1.2550-1.2600 and 1.2650-1.2700-1.2750 with stop loss closing below 1.2300.

USD/JPY

USD/JPY on Thursday made intra‐day low of JPY107.85/USD and made an intraday high of JPY108.52/USD and settled the day up by 0.0322% at JPY108.48/USD.

Technicals in Focus:

In daily charts, JPY is sustaining above 100DMA (110.64), 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 109.05-111.00 with risk above 111.00 targeting 108.50-107.60-107.00 and 106.50-106.00. Long positions above 108.50-106.00 with targets of 109.05-109.50-110.00-110.60 with stop below 106.00.