Daily Market Lookup

• The dollar pushed higher in early European trade Friday, along with the Japanese yen, as U.S. President Donald Trump testing positive for the Covid-19 virus hit risk sentiment, resulted in demand for safe haven currencies. President Donald Trump said on Friday, via a tweet, that he and his wife Melania had tested positive for the coronavirus, and were going into quarantine. This follows Hope Hicks, a trusted adviser, also testing positive earlier on Thursday. The virus is making broader inroads across the U.S. as seasonal factors start to work in its favor again. New cases of Covid rose in 27 out of 50 U.S. states in September compared with August, according to a Reuters analysis. Infections are up 4.4% on a seven-day rolling average. Risk sentiment had already been damaged by the idea the new U.S. fiscal stimulus package was stalled in Washington. The House passed a $2.2 trillion Democrat-only fiscal stimulus package late Thursday, but this bill is extremely unlikely to pass through the Republican-dominated Senate. At the same time the latest block of economic data has tended to suggest that the U.S. economic recovery could be stagnated. With this in mind, attention will also turn to the official U.S. jobs report for a gauge on the strength of the labor market in the world’s largest economy. News of Trump's condition has overshadowed what was set to be the centerpiece of the day's action - the release of the U.S. labor market report at 8:30 AM ET (1230 GMT).
• The dollar and yen rose on Friday after U.S. President Donald Trump's positive test for COVID-19 spooked investors, just a month out from November's presidential election. Trump said on Twitter that he and his wife Melania had COVID-19 and would begin quarantine and recovery immediately. The yen made its sharpest gain in more than a month to reach a one-week high of 104.95 per dollar after the Tweet and the greenback rose as much as 0.7% on the risk-sensitive Australian dollar. Both then pulled back as traders puzzled over how it might affect the election, underscoring market uncertainty around the implications for the November vote. Sterling advanced after Downing Street announced British Prime Minister Boris Johnson and European Commission President Ursula von der Leyen would meet on Saturday to discuss next steps in acrimonious Brexit talks. Both lost half a percent against the yen but lifted from session lows. U.S. stock futures also pared some losses, though commodities remained under pressure. Analysts said the next moves would depend on Trump's health, how far the virus has spread amongst top U.S. officials and politicians and on voters' response. Against a basket of currencies the dollar tacked on 0.1%, but remains down 0.8% for the week - its softest weekly performance since late August - as hopes for U.S. stimulus have had investors in the mood for riskier bets. Still, even before Trump's diagnosis, investors had begun to fret that the hoped-for U.S. fiscal stimulus package had stalled in Washington, and were nervously awaiting U.S. jobs data due at 1230 GMT With House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin at odds over what Pelosi described as differences over dollars and values, doubts are now creeping in over whether a deal can be done before the election. The recovery is also slowing down, and economists expect data due at 1230 GMT to show U.S. hiring increased by 850,000 jobs in September, a smaller gain than August Concerns are also growing that corona virus infection rates are climbing in Europe and the United States. Madrid will become the first European capital to go back into lockdown in coming days to fight a steep surge in cases. A record increase in new cases in Wisconsin on Thursday fanned fears of hospitals there being overwhelmed.
• Oil prices lost more than 3% on Friday after U.S. President Donald Trump tested positive for COVID-19 and negotiators failed to agree a U.S. stimulus package just as rising global oil output threatens to overwhelm a weak price recovery. U.S. and Brent crude are heading for drops of around 7% and 6% respectively this week for a second consecutive week of declines. In a tweet, Trump said that he and First Lady Melania Trump tested positive for COVID-19, prompting sell-offs on U.S. and European stock markets. Oil was already in negative territory after a bipartisan deal on U.S. stimulus continued to elude House Speaker Nancy Pelosi and the White House, adding to fears about worsening demand without more support for the economy. Crude supplies from the Organization of the Petroleum Exporting Countries (OPEC) rose in September by 160,000 barrels per day (bpd) from a month earlier, a Reuters survey showed. The increase was mainly the result of increased supplies from Libya and Iran, OPEC members that are exempt from a supply pact between OPEC and allies led by Russia - a group known as OPEC+. Libya's production has risen faster than analysts expected after the relaxation of a blockade by the Libyan National Army. Its crude output has risen to 270,000 bpd as the country ramps up export activity, a Libyan oil source told Reuters on Thursday. New COVID-19 cases worldwide have rise to more than 34 million, nearly 2 million more than at the end of last week, based on Reuters tallies. This week marked the grim milestone of 1 million deaths and several countries are tightening restrictions and contemplating lockdowns as infections accelerate, prompting concerns about the impact on fuel demand.

Gold – XAU

Gold on Friday made its intraday high of US$1916.97/oz and low of US$1889.74/oz. Gold down 0.383% at US$1897.18/oz.

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 1890-1810 with risk below 1810, targeting 1916-1934-1944 and 1955-1964-1976. Sell below 1900-1955 keeping stop loss closing above 1955, targeting 1882-1869-1862 and 1850-1842-1820.

Silver - XAG

Silver on Friday made its intraday high of US$24.19/oz and low of US$23.46/oz settled up by 0.0463% at US$23.72/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 23.30-21.05 targeting 24.00-24.50-25.10 and 26.00-26.50, stop breakage below 21.50. Sell below 24.00-28.00 with stop loss above 28.00; targeting 24.00-23.30-22.90 and 22.20-21.50.

Oil - WTI

Crude Oil on Friday made an intra‐day high of US38.782/bbl, intraday low of US$36.76/bbl and settled down by 4.386% to close at US$37.03/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 37.50-34.50 with risk daily closing below 34.50 and targeting 38.40-39.00-39.70 and 40.60-41.60-42.00. Sell in between 38.40-41.00 with stop loss at 41.00; targeting 37.50-36.40-35.90 and 34.70-34.00.

EUR/USD

EUR/USD on Friday an intraday low of US$1.1695/EUR, high of US$1.1748/EUR and settled the day down by 0.240% to close at US$1.1716/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 1.1690-1.1460 with risk below 1.1460, targeting 1.1730-1.1800 and 1.1900-1.1955. Sell below 1.1730-1.2000 targeting 1.1690-1.1635-1.1570 and 1.1500-1.1460 with stop-loss at daily closing above 1.2050.

GBP/USD

GBP/USD on Friday made an intra‐day low of US$1.2835/GBP, high of US$1.2953/GBP and settled the day up by 0.3329% to close at US$1.2927/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 1.2940-1.3270 with targets at 1.2820-1.2735-1.2650 and 1.2600-1.2510 stop-loss should be 1.3270. Buy above 1.2900-1.2450 with targets 1.2900-1.3000 and 1.3050-1.3100-1.3210 with stop loss closing below 1.3000.

USD/JPY

USD/JPY on Thursday made intra‐day low of JPY105.72/USD and made an intraday high of JPY105.72/USD and settled the day up by 0.023% at JPY105.50/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 105.00-108.00 with risk above 108.00 targeting 104.90-104.50-103.90 and 103.50-103.10. 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.