Daily Market Lookup

• The dollar was down on Monday morning in Asia, with China due to release quarterly growth data, including GDP and industrial production readings, later in the day, despite fading hopes for the latest fiscal stimulus package to be passed by the U.S. Congress ahead of the Nov. 3 U.S. presidential elections. The risk-sensitive Antipodean currencies saw gains over expectations that the Chinese data will show strong growth for the quarter. Investors are hoping that a strong recovery in the world’s second largest economy will strengthen demand amid rising COVID-19 cases and the re-introduction of restrictive measures such as lockdowns. In the U.S., despite House of Representatives Speaker Nancy Pelosi setting a Tuesday deadline for Congress to reach consensus on a deal before the election, most investors remain doubtful that the deadline will be reached as a Joe Biden victory looks imminent. Meanwhile, Pelosi and Treasury Secretary Steven Mnuchin discussed stimulus package efforts via a phone call on Saturday and are due to speak again later in the day. Trump has also renewed his offer to up the package’s price tag. The dollar clung to gains on Monday, supported by investor worries about the looming U.S. election and the fading prospects of any fiscal stimulus beforehand, while the Chinese yuan held firm ahead of the release of quarterly growth data. The dollar index (=USD) was steady in early trade, following a 0.7% rise last week when a global surge in coronavirus cases and an impasse over the stimulus package stoked caution. The risk-sensitive Australian and New Zealand dollars edged higher on expectations that data due later on Monday shows strong growth in China, and on faint hopes that Democrats and the White House could agree on a new spending program. But enthusiasm was tempered by the opposition of Senate Republicans and as investors focused on what the election outcome means for stimulus later, with a Joe Biden victory seen weakening the dollar by boosting sentiment with big spending. He said a Biden administration with control of the Senate could pass a stimulus program as large as $3.5 trillion. Something closer to $1 trillion was probable if Biden won the presidency but the Democrats failed to win the Senate, Weston said, while a Donald Trump victory and a split Congress could limit spending to between $500 billion and $1 trillion. Fifteen days out from election day, Biden leads Trump by about ten points in national polls, and has a narrow lead in several battleground states. The pair are due to face off in a final debate on Thursday. The yuan has largely shrugged off hints last week from Chinese policymakers that its recent rise has been too fast and too large, returning to sit near an 18-month high of 6.6788 in anticipation of strong GDP growth and capital inflows. Investors globally are pinning hopes on a robust recovery in China to help restart demand as economies struggle with heavy lockdowns and a second wave of coronavirus infections. The world's second-largest economy likely grew 5.2% in July-September from a year earlier, faster than the second quarter's 3.2%, according to a Reuters poll.
• Oil prices fell on Monday after reports that China's third-quarter economic growth did not rise as much as expected, underscoring concerns that surging coronavirus cases globally are impacting demand in the world's largest oil importer. The world's second-largest economy in the third quarter expanded by 4.9% from a year earlier, missing analyst expectations, government data showed. Refiners in China, the world's second-largest oil user, slowed their processing rates in September and industrial metal imports, underpinned by government stimulus, were lower. The Chinese data showed growth in goods and services is softening while the data on crude processing and industrial metals output, given a lifeline from fiscal stimulus, were "disappointing", said Howie Lee, an economist at Oversea-Chinese Banking Corp (OCBC). China's oil-buying frenzy earlier this year is expected to slow in the fourth quarter amid high inventories and limited import quotas for independent refiners. OCBC's Lee added that investors are focusing on the Joint Ministerial Monitoring Committee (JMMC) meeting of the OPEC+ group happening later on Monday. OPEC+ consists of the Organization of the Petroleum Exporting Countries and producer allies such as Russia. The JMMC may decide whether it will delay plans reduce its current supply cuts of 7.7 million barrels per day (bpd) by 2 million bpd starting in January. Prices are unlikely to rally on a delay since that has been priced in by the market, Lee said.
• Last week's meeting of the OPEC+ Joint Technical Committee reported a gloomier fuel demand outlook because of fears that a prolonged second wave of the COVID-19 pandemic and that a jump in Libyan output could push the oil market into surplus next year Energy firms in the U.S., the world's biggest oil producer, last week added the most oil and natural gas rigs since January as producers return to the well pad with crude prices holding around $40 a barrel over the past several months.

Gold – XAU

Gold on Friday made its intraday high of US$1913.89/oz and low of US$1897.67/oz. Gold down 0.226% at US$1900.56/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 1916-1810 with risk below 1810, targeting 1934-1944 and 1955-1964-1976. Sell below 1934-1980 keeping stop loss closing above 1955, targeting 1916-1900-1882 and 1869-1862-1850.

Silver - XAG

Silver on Friday made its intraday high of US$24.51/oz and low of US$24.04/oz settled up by 0.398% at US$24.14/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 24.50-25.10 and 26.00-26.50, stop breakage below 21.50. Sell below 24.50-28.00 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 US41.28/bbl, intraday low of US$40.33/bbl and settled down by 0.430% to close at US$40.93/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 40.80-37.50 with risk daily closing below 37.50 and targeting 41.20-42.00-42.50 and 43.10-43.85. Sell in between 40.80-43.85 with stop loss at 44.00; targeting 40.10-39.70-39.00 and 38.40-37.50-36.40.

EUR/USD

EUR/USD on Friday an intraday low of US$1.1693/EUR, high of US$1.1745/EUR and settled the day up by 0.108% to close at US$1.1719/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 1.1700-1.1460 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 Friday made an intra‐day low of US$1.2861/GBP, high of US$1.2961/GBP and settled the day up by 0.025% to close at US$1.2917/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 1.3020-1.3400 with targets at 1.2940-1.2820-1.2735 and 1.2650-1.2600 stop-loss should be 1.3270. Buy above 1.2940-1.2600 with targets 1.3020-1.3100-1.3190 and 1.3250-1.3400 with stop loss closing below 1.2650.

USD/JPY

USD/JPY on Ftriday made intra‐day low of JPY105.18/USD and made an intraday high of JPY105.46/USD and settled the day down by 0.0265% at JPY105.38/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 105.50-108.00 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.