Daily Market Lookup

• The battered dollar’s long-term fortunes are unlikely to improve regardless of who wins Tuesday’s U.S. presidential election, investors and analysts said. Despite its recent bounce against a basket of currencies, the dollar index (=USD) is still down about 9% from its March highs and on track for its worst year since 2017, weighed down by expectations that U.S. rates will remain near historic lows for years to come. Many market participants believe that a victory by Joe Biden - currently the front-runner in polls - and a potential Democratic sweep would likely weigh on the U.S. currency further, as the former vice president is expected to open the door to policies that investors view as dollar-negative, including robust fiscal stimulus. Four more years of a Donald Trump presidency may offer a less-clear path for the dollar. Although a continuation of Trump’s belligerent approach toward China would likely boost the dollar’s allure as a haven asset, those gains may be outweighed by factors such as continued negative U.S. real yields, analysts said. Here are some of the main factors expected to influence the dollar over the long term. For years, comparatively high U.S. interest rates relative to other developed countries supported the dollar by making it more attractive to investors seeking yield. Real, or inflation-adjusted, yields on U.S. 10-year Treasuries plunged below zero in 2020 amid the coronavirus pandemic. That has diminished the dollar's attractiveness and fueled rallies in everything from stocks to gold. While that short position reflects the negative sentiment swirling around the dollar, it could also fuel gains if a change in the narrative forced investors to unwind those bets all at once. The uncertainty surrounding a contested election could be one such event. Some analysts believe a Trump win or divided government - which could result in a smaller or delayed fiscal stimulus package - may be another. Trump has railed against a strong dollar throughout most of his term, complaining that it gives other nations an unfair competitive advantage in trade. Although the accelerated fiscal spending expected in a potential Biden presidency may weigh on the dollar, some believe the Democrat’s less confrontational approach to foreign policy may bolster the dollar’s appeal as a reserve currency.

Gold – XAU

Gold on Monday made its intraday high of US$1895.96/oz and low of US$1873.32/oz. Gold up 0.936% at US$1894.13/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 1884-1847 with risk below 1854, targeting 1887-1900 and 1916-1934-1944. Sell below 1887-1934 keeping stop loss closing above 1940, targeting 1874-1868-1860 and 1854-1847.

Silver - XAG

Silver on Monday made its intraday high of US$24.15/oz and low of US$23.38/oz settled up by 2.277% at US$24.06/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 23.10-21.05 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 Monday made an intra‐day high of US37.30/bbl, intraday low of US$33.79/bbl and settled up by 5.451% to close at US$37.17/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 36.50-34.10 with risk daily closing below 34.10 and targeting 37.00-37.70 and 38.00-38.90-39.70. Sell in between 37.05-40.25 with stop loss at 40.25; targeting 36.50-35.70-34.10and 33.80-32.70-31.90.

EUR/USD

EUR/USD on Monday an intraday low of US$1.1621/EUR, high of US$1.1655/EUR and settled the day down by 0.0523% to close at US$1.1640/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 1.1635-1.1460 with risk below 1.1460, targeting 1.1710-1.1790-1.1860 and 1.1900-1.1955. Sell below 1.1710-1.1950 targeting 1.1635-1.1570 and 1.1500-1.1460 with stop-loss at daily closing above 1.1950.

GBP/USD

GBP/USD on Monday made an intra‐day low of US$1.2853/GBP, high of US$1.2942/GBP and settled the day down by 0.024% to close at US$1.2916/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 1.2940-1.3490 with targets at 1.2900-1.2820-1.2750 and 1.2705-1.2650 stop-loss should be 1.3270. Buy above 1.2900-1.2600 with targets 1.30-1.3190 1.3250 and 1.3400-1.3450 with stop loss closing below 1.2650.

USD/JPY

USD/JPY on Monday made intra‐day low of JPY104.47/USD and made an intraday high of JPY104.94/USD and settled the day up by 0.173% at JPY104.68/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 104.50-103.90 and 103.50-103.10. Long positions above 104.10-102.00 with targets of 106.90-107.50 and 107.90-108.40-109.40 with stop below 105.00.