Daily Market Lookup

• The U.S. dollar pushed higher Monday, as investors braced for more dire news on the fallout from the coronavirus. The week ahead brings U.S. monthly employment figures and eurozone survey indicators, while governments around the world make tentative steps toward easing lockdowns. One of the currencies hard hit against the greenback Monday has been the euro following a report that the European Union may need to triple the amount of aid currently proposed to tackle the coronavirus crisis. Given the angst that resulted from the discussions to produce the 500 billion euros worth of aid, finding the additional one trillion euros could prove tricky. Meanwhile rising Italian borrowing costs are potentially bringing the matter to a head. Hit hard by the coronavirus crisis and with a debt burden of over 135% of GDP, Italy is widely seen as the eurozone state most in need of largesse from its neighbors, particularly after the region’s politicians failed to agree a sale of coronabonds, a debt instrument which would pool the credit risk of weaker countries like Italy with top-rated ones like Germany. The Financial Times reported that the European Central Bank had held talks with the European Commission about establishing a centrally-backed 'bad bank' to remove toxic loans from banks' balance sheets. It said the proposal faced stiff opposition. The U.S. dollar was up on Monday morning in Asia as investors braced for a tough quarter ahead. But some investors are cautiously hopeful that the worst of the pandemic could be loosening its grip on the global economy.
• Caution recaptured world markets on Monday as another drubbing for U.S. crude oil futures kicked off a week of data and earnings that will drive home the damage being inflicted by global coronavirus lockdowns. The equity and other major markets however were still trading largely on the newsflow of the European virus numbers gradually coming down, he added U.S. President Donald Trump said on Sunday that Republicans were “close” to getting a deal with Democrats on a support package for small business The United States has by far the world’s largest number of confirmed coronavirus cases, with more than 750,000 infections and over 40,500 deaths, according to a Reuters tally. The Fed has bought nearly $1.3 trillion of Treasuries alone, and many billions of non-sovereign debt it would historically have never gone near. That damage should become all more clear this week with April global purchasing manager data - seen as some of the most forward-looking economic gauges - being published on Thursday. A taster on Monday was that Japan reported its exports down almost 12% in March from a year earlier, with shipments to the United States down over 16%. In the currency markets, the dollar gained broadly as the concerns about global growth boosted the safe-haven appeal of the greenback and weighed on risk-oriented currencies such as the Australian dollar. The dollar’s gains were despite the latest trader positioning data showing investors have been ramping up their short positions or bets against the greenback. Italy’s borrowing costs rose meanwhile, heading back towards last week’s one-month highs, reflecting unease before a European Union summit later this week over how to tackle the economic fallout of the coronavirus crisis. Selling pressure on Italian government bonds has returned in the past week, undoing some of the benefits of the European Central Bank’s massive bond-buying scheme, after euro zone politicians failed to agree to common debt issuance as a means of addressing the crisis. Italian Prime Minister Guiseppe Conte used an interview with Germany’s Sueddeutsche Zeitung on Monday to repeat calls for the EU to issue common euro zone bonds to demonstrate the bloc’s solidarity in the face of the pandemic.
• Oil continued to slide from the previous session on Monday in Asia as producers continue to grapple with a supply glut. Investors remain unconvinced that OPEC+’s cut of nearly 10 million barrels agreed to in early April will ease oversupply as countries continue to extend lockdowns imposed to prevent the spread of the COVID-19 pandemic and economies contract. David Lennox, resource analyst at Fat Prophets, agreed with Hari. There were also concerns that countries’ storage capacity is rapidly running out Meanwhile in Asia’s oil hub of Singapore Hin Leong Trading requested court protection from its creditors amid allegations it hid around $800 million in losses from futures trading. Crude oil futures fell on Monday, with U.S. futures touching levels not seen since 1999, extending weakness on the back of sliding demand and concerns that U.S. storage facilities will soon fill to the brim amid the coronavirus pandemic. The oil market has been under pressure due to a spate of reports on weak fuel consumption and grim forecasts from the OPEC and the International Energy Agency. The plunge in crude oil prices reflects a glut at the main U.S. storage facilities at Cushing and a big drop in demand, said Michael McCarthy, chief market strategist at CMC Markets in Sydney. Production cuts from OPEC and its allies such as Russia will also kick from May. The group has agreed to reduce output by 9.7 million bpd to stem a growing supply glut after stay-at-home orders and business furloughs to curb the COVID-19 pandemic that has killed more than 164,000 people worldwide sap fuel demand. The oil industry has been swiftly reducing production in the face of an estimated 30% decline in fuel demand worldwide. Saudi Arabian officials have forecast that total global supply cuts from oil producers could amount to nearly 20 million bpd, but that includes voluntary cuts from nations like the United States and Canada, which cannot simply turn on or off production in the same way as most OPEC nations.

Gold – XAU

Gold on Friday made its intraday high of US$1718.60/oz and low of US$1679.77/oz. Gold down 1.99% at US$1683.64/oz.

Technicals in Focus:

In daily charts, prices are above 50DMA (1596) and breakage below will call for 1550. MACD is below zero line but histograms are increasing trend and it will bring upward stance in the upcoming sessions. RSI is in overbought region and more upside is expected before it gets stretched. Stochastic Oscillator is in overbought territory and giving negative crossover to bearish stance for intraday trade.

Trading Strategy: Buy on Dips

Based on the charts and explanations above; buy above 1704-1645 with risk below 1645, targeting 1,720-1740 and 1755-1774. Sell below 1720-1774 keeping stop loss closing above 1774, targeting 1705-1690-1674 and 1660-1645.

Silver - XAG

Silver on Friday made its intraday high of US$15.53/oz and low of US$14.98/oz settled down by 2.21% at US$15.17/oz.

Technicals in Focus:

On daily charts, silver is sustaining above 100DMA (17.55), breakage below will lead to 17.30. 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 overbought region and giving negative crossover to show upside move for the intraday trade.

Trading Strategy: Buy on Dips

Based on the charts and explanations above, buy above 15.00-13.00 targeting 15.60-16.10 and 16.70-17.00-17.40; stop breakage below 13.00. Sell below 15.60-17.40 with stop loss above 17.40; targeting 15.30-14.40 and 13.90-13.60-13.00.

Oil - WTI

Crude Oil on Friday made an intra‐day high of US26.95/bbl, intraday low of US$24.68/bbl and settled down by 5.24% to close at US$25.27/bbl.

Technicals in Focus:

On daily charts, oil is sustaining below its 50DMA i.e. 40.00 which is a resistance level and breakage above will call for 44.00. MACD is below zero line and histograms are in increasing mode will bring bullish 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 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 23.00-19.50 with risk daily closing below 19.50 and targeting 23.60-25.00-25.60 and 26.00-27.00-28.00. Sell in between 23.60-27.30 with stop loss at 27.60; targeting 23.00-21.00-20.45 and 19.90-19.50.

EUR/USD

EUR/USD on Friday an intraday low of US$1.0811/EUR, high of US$1.0891/EUR and settled the day up by 0.3386% to close at US$1.0874/EUR.

Technicals in Focus:

On daily charts, prices are sustaining below 100DMA (1.1031), which become immediate resistance level, break above will target 1.1090. 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 right now.

Trading Strategy: Neutral to Buy

Buy above 1.0900-1.0630 with risk below 1.0630, targeting 1.0970-1.1030 and 1.1060-1.1150. Sell below 1.0950-1.1150 targeting 1.0900-1.0850-1.0770 and 1.0700-1.0630 with stop-loss at daily closing above 1.1200.

GBP/USD

GBP/USD on Friday made an intra‐day low of US$1.2405/GBP, high of US$1.2521/GBP and settled the day up by 0.386% to close at US$1.2503/GBP.

Technicals in Focus:

On daily charts, prices are sustaining below 200DMA (1.2647) is become major resistance level. 14-D RSI is currently in neutral region and direction is difficult to predict on RSI bases. The Stochastic Oscillator is in overbought territory and giving positive crossover to confirm bullish stance. MACD is above zero line but histograms are increasing lead to upward movement.

Trading Strategy: Neutral to Sell

Based on the charts and explanations above; sell below 1.2590-1.2740 with targets at 1.2500-1.2400-1.2320 and 1.2250-1.2180-1.2130 stop-loss should be below 1.2740. Buy above 1.2500-1.2130 with targets 1.2500-1.2590-1.2650 and 1.2700-1.2740 with stop loss closing below 1.2100.

USD/JPY

USD/JPY on Friday made intra‐day low of JPY107.29/USD and made an intraday high of JPY108.07/USD and settled the day down by 0.345% at JPY107.53/USD.

Technicals in Focus:

In daily charts, JPY is sustaining above 200DMA (108.30), 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 neutral territory and signaling to sell as it has given negative crossover to confirm bearish stance.

Trading Strategy: Neutral to Sell

Sell below 108.40-111.50 with risk above 111.50 targeting 109.00-108.30-107.50-106.90 and 106.00-105.50. Long positions above 108.30-105.00 with targets of 109.40-110.20-110.90 and 111.50-112.00 with stop below 105.00.