Daily Market Lookup

• Asian stocks pared gains on Thursday and safe-haven assets rose as optimism for a quick resolution to the U.S.-China trade war faded. Asian shares got off to a bright start after U.S. President Donald Trump said a deal to end a nearly 15-month trade war with China “could happen sooner” that people think. However, the positive mood faded and Chinese shares fell 0.35% as Trump’s repeated mixed messages about trade negotiations caused investors to curb their enthusiasm. Treasury prices and gold rose in a sign that some investors preferred safe assets given lingering risks posed by trade friction and political uncertainty. The United States and China have been locked in a year-long dispute over Beijing’s trade practices that has slowed global growth and increased the risk of recession for some economies. Analysts tempered their optimism over a resolution to the trade war because Trump’s public comments often send mixed signals. Just on Tuesday, Trump sharply criticised China in a speech at the United Nations General Assembly, where he said he would not accept a “bad deal”. Trump and Japanese Prime Minister Shinzo Abe signed a limited trade deal on Wednesday that cuts tariffs on U.S. farm goods, Japanese machine tools and other products while further staving off the threat of higher U.S. car duties. Japanese shares initially got a boost from the agreement but turned lower in volatile trade as investors squared positions before shares go ex-dividend from Friday. Investors are largely shrugging off the Democrats’ decision to begin an impeachment inquiry into Trump. The move came as a summary of a telephone call showed the U.S. president had asked Ukraine’s president to investigate a political rival. Casting doubt over the likelihood of impeachment is the majority held by Trump’s Republicans in the Senate, which can be used to quash any attempt to remove the president from office.
• The U.S. dollar gained on Thursday in Asia on renewed Sino-U.S. trade hopes. Sino-U.S. trade hopes reignited after U.S. President Donald Trump suggested an agreement with China might come sooner than anyone thinks, although he didn't offer many specifics. Just on Tuesday, Trump accused China of unfair trade practices in a speech to the General Assembly at the United Nations in New York. The U.S. dollar recorded its sharpest daily gain in three months following the news, before giving up some of its gains today in Asian trade. Prospect of early U.K. elections with just five weeks to go until the Brexit deadline was cited as a headwind for the pound. On Wednesday, U.K. Attorney-General Geoffrey Cox said a motion for a general election will be brought to parliament “shortly.” He made the remarks a day after the Supreme Court’s ruling that Prime Minister Boris Johnson’s five week suspension of parliament in the run-up to Brexit was unlawful. The dollar found broad support on Thursday as investors welcomed U.S. President Donald Trump's hints of progress toward a trade deal with China and discounted the prospect of an impeachment probe making much headway in the short term. Sterling nursed losses at $1.2359, after dropping more than 1% overnight as investors priced in many more months of Brexit and election risk. The greenback had been sold when U.S. House of Representatives Speaker Nancy Pelosi said the Democratic-led chamber was launching an impeachment inquiry over Trump's handling of a call to Ukranian President Volodymyr Zelenskiy. A summary of the call subsequently released by the administration showed Trump pressed Zelenskiy to investigate former Vice President Joe Biden - Trump's leading Democratic rival - but did not show Trump threatening to withhold aid. The House inquiry could trigger a trial in the Senate on whether to remove Trump from office, though that is seen as unlikely to succeed because Republicans control the Senate. Trump also on Wednesday stoked hopes for a trade deal by telling reporters in New York that the U.S. and China were having "good conversations" and that an agreement "could happen sooner than you think". Signs of a rebound in the U.S. housing market on Wednesday, when data showed August sales of new single-family homes rose more than expected, further buttressed the dollar. Few market-moving data releases are scheduled on Thursday.
• Oil prices held nearly flat on Thursday after U.S. President Donald Trump said a resolution to the China-U.S. trade rift would come sooner than expected, helping to stave off pressure from rising oil supplies and worries about global growth. President Trump said on Wednesday - a day after a stinging rebuke to China for its trade practices - that Beijing wanted to make a deal "very badly". Trump and Japanese Prime Minister Shinzo Abe also signed a limited trade deal that would open up Japanese markets to some $7 billion worth of U.S. products annually. Both Brent and WTI on Wednesday hit their lowest marks since the attacks on Saudi Arabian oil facilities on Sept. 14, weighed down by a surprise 2.4 million barrels build in U.S. crude inventories last week and a faster than expected recovery of Saudi production capacity. A firmer dollar (DXY), which posted its sharpest daily gain in three months overnight and held steady in Asian trade, also weighed on oil prices as it makes dollar-traded fuel imports more costly for countries using other currencies.

Gold – XAU

Gold on Wednesday made its intraday high of US$1535.07/oz and low of US$1500.37/oz. Gold downi by 1.867% at US$1503.41/oz.

Technicals in Focus:

In daily charts, prices are above 20DMA (1506) and breakage below will call for 1400. 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 neutral 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 1500-1469 with risk below 1469, targeting 1520-1532-1539 and 1545-1550. Sell below 1520-1556 keeping stop loss closing above 1556, targeting 1509-1500 and 1489-1480.

Silver - XAG

Silver on Tuesday made its intraday high of US$18.67/oz and low of US$17.80/oz. Silver settled down by 3.81% at US$17.87/oz.

Technicals in Focus:

On daily charts, silver is sustaining above 50DMA (15.70), breakage below will lead to 15.20. MACD is above zero line and histograms are increasing trend and it will bring bullish stance in the upcoming sessions. RSI is in overbought region, indicating buy signal for now. The Stochastic Oscillator is in neutral 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 17.90-16.60 targeting 18.50-18.90-19.20 and 19.65-20.05; stop breakage below 16.60. Sell below 18.50-20.70 with stop loss above 20.65; targeting 18.05-17.90 and 17.40-17.00-16.70.

Oil - WTI

Crude Oil on Wednesday made an intra‐day high of US$56.92/bbl, intraday low of US$55.49/bbl and settled down by 0.176% to close at US$56.51/bbl.

Technicals in Focus:

On daily charts, oil is sustaining above its 200DMA i.e. 56.35 which is a resistance level and breakage above will call for 57.00-58.00. MACD is above zero line and histograms are in increasing mode will bring bullish 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 neutral region and more downside can be expected to reach the oversold region, which is highly probable.

Trading Strategy: Neutral to Buy

Based on the charts and explanations above; buy above 56.00-54.50 with risk daily closing below 54.50 and targeting 57.00-57.60-58.20 and 59.00-60.20-60.90. Sell below 57.00-60.40 with stop loss at 60.40; targeting 56.60-56.00 and 55.40-54.50.

EUR/USD

EUR/USD of Tuesday made an intraday low of US$1.0936/EUR, high of US$1.1022/EUR and settled the day down by 0.700% to close at US$1.1094/EUR.

Technicals in Focus:

On daily charts, prices are sustaining below 50DMA (1.1129), which become immediate resistance level, break above will target 1.1180-1.1260. 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 in neutral region and giving no directions to consider right now.

Trading Strategy: Neutral to Buy

Buy above 1.0960-1.0815 with risk below 1.0815, targeting 1.1030-1.1090-1.1130 and 1.1160-1.1200. Sell below 1.1030-1.1250 targeting 1.1030-1.1000-1.0940 and 1.0910-1.0860 with stop-loss at daily closing above 1.1250.

GBP/USD

GBP/USD on Wednesday made an intra‐day low of US$1.2344/GBP, high of US$1.2501/GBP and settled the day down by 1.170% to close at US$1.2344/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 1.2400-1.2710 with targets at 1.2350-1.2310 and 1.2250-1.2200 stop-loss should be below 1.2710. Buy above 1.2400-1.2210 with targets 1.2400-1.2440-1.2505 and 1.2570-1.2600-1.2650 with stop loss closing below 1.2300.

USD/JPY

USD/JPY on Tuesday made intra‐day low of JPY106.98/USD and made an intraday high of JPY107.87/USD and settled the day up by 0.679% at JPY107.75/USD.

Technicals in Focus:

In daily charts, JPY is sustaining above 50DMA (107.84), 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 108.00-109.55 with risk above 110.00 targeting 107.50-107.00-106.50 and 106.10-105.50. Long positions above 107.50-105.00 with targets of 108.00-108.50-108.90 and 109.55-110.00 with stop below 105.00.