Daily Market Lookup

• The dollar drifted toward a small weekly loss on Friday, while the Chinese yuan soared to a 17-month high, as investors wagered on a Joe Biden presidency and on more U.S. stimulus spending. The yuan's leap, when China's markets reopened after the Mid-Autumn break, was partly a catch-up since the offshore yuan has gained against a softening dollar during the week. But as it extended gains beyond 1%, its biggest daily jump in nearly two years, traders said it provided one of the clearest indications yet that Biden's lead in the polls is driving bets on a steadier Sino-U.S. relationship. A stronger-than-expected setting of the yuan's trading band also signalled that policymakers in China don't mind its rise. The prospect of a Biden administration less inclined toward tariffs and trade disputes was another boost, he added. Reuters/IPSOS polling this week put Biden, a Democrat, narrowly ahead of Republican President Donald Trump in five states - Wisconsin, Pennsylvania, Michigan, Florida and Arizona - that will play critical roles in deciding the victor. A growing expectation that, whoever wins, U.S. stimulus spending will flow has also been weakening the dollar in the short term, by improving investors' mood and their willingness to buy riskier assets such as stocks and commodity currencies. Talks have resumed between House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin over coronavirus aid plans, two days after President Donald Trump ended them, and investors reckon a Democratic administration would be eager to spend The risk-sensitive Australian dollar rose 0.1% on Friday to put it a fraction higher for the week, despite analysts interpreting a Tuesday central bank statement as a signal of monetary easing to come. Elsewhere, a 10% surge in oil prices this week, on optimism about stimulus and supply disruptions owing to a storm in the Gulf of Mexico and strike in Norway, has boosted oil-linked currencies.
• The dollar was down on Friday morning in Asia, drifting towards a second consecutive weekly loss over higher commodity prices and rekindled expectations that the U.S. Congress will pass the latest stimulus measures. House of Representative Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin resumed talks to discuss the measures, defying President Donald Trump’s ban announced earlier in the week. Investor anticipation of further stimulus measures to support the U.S. economic recovery from the impact of COVID-19 set the greenback into retreat mode as improved risk sentiment sees investors buying riskier assets, such as commodity currencies. With Trump continuing to receive treatment for COVID-19 and refusing to take part in the next presidential debate scheduled for the following week, Democrat candidate Joe Biden is ahead of Trump in polls and looks increasing likely to win the Nov. 3 election. Some investors expect that a Biden win would increase the likelihood of further stimulus measures as the Democrats push for large spending packages. The AUD was flat for the week, despite expectations of more monetary easing from the Reserve Bank of Australia in the wake of its policy statement handed down on Tuesday Chinese markets re-opened after a holiday, with data released earlier in the day showing that September’s Caixin Services Purchasing Managers Index (PMI) increased to 54.8 from August’s reading of 54. The GBP/USD pair edged up 0.16% to 1.2954, holding firm throughout the week as investors continue to monitor the progress towards a Brexit divorce deal between the U.K. and the European Union.

Gold – XAU

Gold on Thursday made its intraday high of US$1900.62/oz and low of US$1881.85/oz. Gold up 0.333% at US$1892.97/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 Thursday made its intraday high of US$24.20/oz and low of US$23.64/oz settled up by 0.370% at US$23.82/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 24.00-21.05 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 Thursday made an intra‐day high of US41.52/bbl, intraday low of US$39.94/bbl and settled up by 2.94% to close at US$41.36/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 40.90-37.50 with risk daily closing below 37.50 and targeting 42.00-42.50 and 43.10-43.85. Sell in between 42.00-43.85 with stop loss at 44.00; targeting 40.90-39.70-39.00 and 38.40-37.50-36.40.

EUR/USD

EUR/USD on Thursday an intraday low of US$1.1731/EUR, high of US$1.1781/EUR and settled the day down by 0.0178% to close at US$1.1758/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 1.1750-1.1460 with risk below 1.1460, targeting 1.1800-1.1860 and 1.1900-1.1955-1.2010. Sell below 1.1800-1.2000 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 Thursday made an intra‐day low of US$1.2890/GBP, high of US$1.2969/GBP and settled the day up by 0.152% to close at US$1.2931/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 1.3000-1.3270 with targets at 1.2900-1.2820-1.2735 and 1.2650-1.2600-1.2510 stop-loss should be 1.3270. Buy above 1.2940-1.2450 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 JPY105.91/USD and made an intraday high of JPY106.10/USD and settled the day up by 0.0689% 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 105.90-108.00 with risk above 108.00 targeting 104.90-104.50-103.90 and 103.50-103.10. Long positions above 105.50-103.00 with targets of 106.90-107.50 and 107.90-108.40-109.40 with stop below 105.00.