Daily Market Lookup

• Asian shares slipped to three-week lows on Friday as the release of a whistleblower complaint against U.S. President Donald Trump added to worries about the global economy, already reeling from the China-U.S. trade war. A whistleblower report released on Thursday said President Donald Trump not only abused his office in attempting to solicit Ukraine’s interference in the 2020 U.S. election for his political benefit, but that the White House tried to “lock down” evidence about that conduct. The report came after the Speaker of the U.S. House of Representatives Nancy Pelosi launched an impeachment inquiry into him this week. On trade issues, news headlines were too mixed for investors to show a clear reaction. CNBC reported that trade war talks were scheduled for Oct. 10-11 in Washington, citing people familiar with the arrangements, and China’s top diplomat said China was willing to buy more U.S. products. But other media reports on Thursday that the United States is unlikely to allow American firms to supply China’s Huawei Technologies undermined hopes of a complete deal between the countries. The damage is already evident as Micron Technology Inc, a major Huawei supplier, forecast first-quarter profit below Wall Street targets, pushing its share prices down 7% in after-hours trade. In the currency market, the euro hovered near a 2-1/2-year low amid concerns about sluggish growth in the currency bloc, with rising fear of recession in its biggest economy, Germany. The gloomy outlook in Europe was in contrast to the United States, where despite some pockets of weakness — such as manufacturing and consumer sentiment — growth remained relatively robust, with the jobless rate at the lowest in nearly 50 years. Some market participants suspect the dollar was also helped by continued tightness in dollar funding after U.S. short-term borrowing costs shot up last week.
• The U.S. dollar was largely unchanged on Friday in Asia as investors remained cautious over recent developments related to an impeachment inquiry into U.S. President Donald Trump. A House committee released a whistleblower report that accused Trump of trying to get Ukraine to investigate the son of former VP Joe Biden, who is one of the top candidates for the 2020 presidential election. The report claims that the White House had tried to lock down a transcript of the call between Trump and the Ukrainian President, which was released Wednesday. The U.S. House of Representative had started the impeachment inquiry earlier this week over the accusations. On the Sino-U.S. trade front, Beijing’s top diplomat said the country is willing to purchase more U.S.-made goods. Wang Yi, China’s foreign minister, said in response to questions from Reuters that trade discussions could yield results if both China and the U.S. "take more enthusiastic measures" to show goodwill and reduce "pessimistic language" in their trade dispute. He said Washington has shown goodwill by easing tariffs on a range of Chinese products. The pound was also under pressure on reports cited European Union's Brexit negotiator, who said Britain had yet to provide "legal and operational" proposals for an agreement on exiting the bloc. The dollar stood tall on Friday, holding near multi-week highs against most major currencies as heightened risks from political tensions to the Sino-U.S. trade war increased its safe-haven luster. The greenback also steadied against the Australian dollar, near its strongest in three weeks, while it regained some ground handed to the New Zealand dollar on Thursday. He added that risk aversion driven by trade war fears, a resilient U.S. economy and increasingly less-dovish-than-expected language from U.S. Federal Reserve board members were supporting the greenback. The pound wallowed at $1.2325, close to a two-week low hit on Thursday after the European Union's Brexit negotiator said Britain had yet to provide "legal and operational" proposals for an agreement on exiting the bloc. Broader sentiment was fickle across markets. Positive comments from the Chinese commerce ministry on progress in trade negotiations had rallied European stocks overnight. Richmond Federal Reserve President Thomas I. Barkin said the U.S. economy looked strong and it was too early to tell whether further rate cuts were needed. But a Bloomberg report that said the United States was unlikely to extend a waiver over Huawei Technologies' blacklist weighed on U.S. equities. Markets are also digesting the impeachment probe launched into U.S. President Donald Trump, who went on the offensive as investors increasingly view the inquiry as a long-term drag rather than a short-term risk. The opening of the probe on Wednesday had initially knocked the dollar, but it soon recovered and surged.
• Oil prices fell on Friday in Asia after Saudi Arabia said its oil production was up and fully running. The fall in prices came after the kingdom said it has recovered from the September from the Sept 14 attack on its energy facilities which briefly disrupted about 5% of daily global crude production. The attacks initially sent oil prices surging about 20%, before giving back some of their gains this week. Worries about Donald Trump’s future also weighed, as an impeachment inquiry hung over the president. After days of pressure by Democrats, the White House released a reconstructed transcript of a call between the president and his Ukrainian counterpart, where Trump is heard asking a “favor” before discussing a corruption probe in the East European nation that links to his political rival Joe Biden. Oil prices fell on Friday, erasing more of the gains realized after the Sept. 14 attacks on Saudi Arabian oil facilities, as the rapid return of production capacity from the world's top exporter squashed risk premiums. Prices were also pressured by worries of weak global economic growth and its effect on oil demand. Saudi Arabia had brought its production capacity back to 11.3 million barrels per day (bpd) less than two weeks after the attacks on it oil facilities, sources briefed on the matter told Reuters this week. The attacks, which knocked out 5.7 million bpd of production, initially sent oil prices up 20% although they dropped soon after as the kingdom pledged to bring back output by the end of September. A surprise 2.4 million-barrel build in U.S. crude inventories last week also weighed on prices. U.S. inventories may rise further over the near term, further pressuring prices, as American refiners curb runs for maintenance, analysts said.

Gold – XAU

Gold on Thursday made its intraday high of US$1512.25/oz and low of US$1500.36/oz. Gold down by 0.055% at US$1504.39/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 Thursday made its intraday high of US$18.03/oz and low of US$17.71/oz. Silver settled down by 0.641% at US$17.78/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 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 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 Thursday made an intra‐day high of US$56.74/bbl, intraday low of US$53.33/bbl and settled down by 0.215% to close at US$56.43/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 55.90-53.90 with risk daily closing below 53.90 and targeting 56.60-57.00-57.60 and 58.20-59.00-60.20. Sell below 56.60-60.40 with stop loss at 60.40; targeting 55.90-55.40-54.50.

EUR/USD

EUR/USD of Thursday made an intraday low of US$1.0907/EUR, high of US$1.0966/EUR and settled the day down by % to close at US$1.0919/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 Thursday made an intra‐day low of US$1.2302/GBP, high of US$1.2379/GBP and settled the day down by 0.210% to close at US$1.2318/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

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.

USD/JPY

USD/JPY on Thursday made intra‐day low of JPY107.41/USD and made an intraday high of JPY107.95/USD and settled the day up by 0.0612% at JPY107.82/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.