Daily Market Lookup

• The euro held onto gains against the dollar on Thursday as traders braced for a European Central Bank meeting to gauge policymakers' views on the common currency's recent appreciation and its impact on inflation. Sterling steadied above a six-week low but could face more losses due to growing concern that Britain and the European Union will fail to agree a trade deal. While markets expect the ECB to keep policy steady, investors will closely watch President Christine Lagarde's comments on how the euro's rise to a two-year high this month affects the outlook for inflation and economic growth. Sentiment for cable has taken a hit after Britain unveiled draft legislation that analysts say raises the possibility of it exiting the EU single market in four months time with no trade agreement in place. The euro got a boost on Wednesday after Bloomberg News reported that ECB officials are growing more confident in the bloc's economic outlook. However, traders may be reluctant to buy the common currency further before the ECB meeting due to earlier media reports that officials are growing uncomfortable with the euro's almost 6% appreciation against the dollar from its June low. The ECB's views are also in the spotlight after euro-zone consumer prices turned negative in August for the first time since 2016, and the U.S. Federal Reserve switched to focusing on average inflation. With no major economic data scheduled during Asian trading, market moves could be subdued as investors wait for potential ECB catalysts. Traders in the dollar are closely watching global equities to see if a rebound in U.S. tech shares from a rapid sell-off will support riskier assets in other markets.
• The dollar was down on Thursday morning in Asia, ahead of the European Central Bank (ECB) meeting taking place later in the day. The euro held onto gains against the greenback ahead of the meeting, with the meeting’s agenda expected to focus on policymakers’ views on the euro’s recent appreciation and its impact on inflation. Although ECB is widely expected to keep its policies unchanged, investors are looking to President Christine Lagarde’s comments on the subject to gauge the outlook for inflation and economic growth. Although the euro saw an uptick on the back of reports that ECB officials continue to be confident of the E.U.’s economic outlook, concerns over the single currency's almost 6% appreciation against the dollar from its June low could see the rate slow down. The GBP/USD pair inched down 0.05% to 1.2994. The U.K. on Wednesday unveiled draft legislation that increased the possibility of a no-deal Brexit in four months' time. The mounting concerns could spell more losses for the pound, which steadied above the six-week low reached during the previous session.

Gold – XAU

Gold on Wednesday made its intraday high of US$1950.77/oz and low of US$1919.94/oz. Gold up 0.736% at US$1945.77/oz.In daily charts, prices are above 50DMA (1882) and breakage below will call for 1805. MACD is above zero line and histograms are also increasing trend and it will bring upward stance in the upcoming sessions. RSI is in neutral region and more upside is expected before it gets stretched. Stochastic Oscillator is in overbought territory and giving positive crossover to bullish stance for intraday trade.

Technicals in Focus:

In daily charts, prices are above 50DMA (1882) and breakage below will call for 1805. MACD is above zero line and histograms are also increasing trend and it will bring upward stance in the upcoming sessions. RSI is in neutral region and more upside is expected before it gets stretched. Stochastic Oscillator is in overbought territory and giving positive crossover to bullish stance for intraday trade.

Trading Strategy: Buy on Dips

Based on the charts and explanations above; buy above 1940-1870 with risk below 1870, targeting 1954-1971 and 1989-2010-2023. Sell below 1954-2010 keeping stop loss closing above 2010, targeting 1940-1924 and 1900-1889.

Silver - XAG

Silver on Wednesday made its intraday high of US$27.11/oz and low of US$26.39/oz settled up by 1.036% at US$26.90/oz.

Technicals in Focus:

On daily charts, silver is sustaining above 20DMA (21.60), breakage below will lead to 19.40. MACD is above zero line and histograms are increasing trend and it will bring bullish stance in the upcoming sessions. RSI is approaching 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 26.55-24.00 targeting 27.00-28.10-29.00 and 29.80-30.50-31.00, stop breakage below 22.50. Sell below 27.00-30.50 with stop loss above 30.50; targeting 26.55-26.10 and 25.00-24.30.

Oil - WTI

Crude Oil on Wednesday made an intra‐day high of US38.66/bbl, intraday low of US$36.46/bbl and settled up by 2.407% to close at US$37.94/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 37.10-34.50 with risk daily closing below 34.50 and targeting 38.55-39.00 and 39.50-40.60-42.00. Sell in between 37.90-40.60 with stop loss at 41.00; targeting 37.10-38.55-39.00 and 39.50-40.60.

EUR/USD

EUR/USD on Wednesday an intraday low of US$1.1798/EUR, high of US$1.1836/EUR and settled the day down by 0.124% to close at US$1.1816/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 oversold 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 1.1800-1.1600 with risk below 1.1600, targeting 1.1850-1.1900 and 1.1955-1.2050-1.2100. Sell below 1.1850-1.2250 targeting 1.1800-1.1730-1.1690 and 1.1635-1.1600 with stop-loss at daily closing above 1.2250.

GBP/USD

GBP/USD on Wednesday made an intra‐day low of US$1.2884/GBP, high of US$1.3022/GBP and settled the day up by 0.154% to close at US$1.3000/GBP.

Technicals in Focus:

On daily charts, prices are sustaining above 20DMA (1.3134) is become immediate 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 negative crossover to confirm bearish 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 1.3050-1.3210 with targets at 1.2940-1.2900-1.2820 and 1.2735-1.2650 stop-loss should be 1.3210. Buy above 1.2940-1.2735 with targets 1.3180-1.3000-1.3050-1.3100 and 1.3210-1.3290 with stop loss closing below 1.3000.

USD/JPY

USD/JPY on Tuesday made intra‐day low of JPY105.85/USD and made an intraday high of JPY106.37/USD and settled the day down by 0.185% at JPY106.01/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 106.50-111.00 with risk above 111.00 targeting 106.10-105.50-104.90 and 104.50-103.90-103.10. Long positions above 106.50-103.00 with targets of 106.90-107.50 and 107.90-108.40-109.40 with stop below 105.00.