Daily Market Lookup

• The dollar drifted lower in early European trade Monday, as lingering vaccine optimism and expectations of more Federal Reserve largesse see traders desert this safe haven. Largely promising trial results for three major vaccine candidates have prompted investors to seek out riskier assets, with the dollar being hit hard as a consequence, even with the wave of new infections, and fresh lockdowns, across Europe and the United States. Given the absence of new fiscal stimulus from U.S. lawmakers to help the economy during the second Covid wave, investors now expect the Federal Reserve to step in with more bond buying, when it next meets in December. With this in mind, Fed head Jerome Powell’s testimony before Congress on Tuesday and Wednesday will be studied carefully for clues as to the central bank's thinking, as well as the monthly jobs report at the end of the week. The two sides are running out of time to clinch a Brexit trade deal, Environment Secretary George Eustice said on Monday. The dollar fell to a more than two-year low on Monday and is set to log its largest monthly fall since July, as a combination of vaccine optimism and bets on more monetary easing in the United States drives investors out of the world's reserve currency. Against a basket of currencies, the greenback slipped 0.1% to 91.707, its lowest since April 2018. The risk-sensitive New Zealand dollar hit a two-and-a-half year high and is headed for its best monthly percentage gain in seven years. Sterling stood at $1.3325, having climbed steadily this month to its highest since September, as investors wagered a Brexit deal would be brokered even as the deadline for talks loomed ever larger. The dollar index is down some 2.4% for November as promising trial results for three major vaccine candidates excited investors about an eventual end to the coronavirus pandemic. It is nearly 11% below a March peak of 102.990. Nervousness about a wave of new infections across Europe and the United States, and fresh lockdowns, have provided some support to safe-haven currencies and a slight brake on the dropping dollar. However, as the drawn-out U.S. election has distracted lawmakers from passing any sort of fiscal spending package, investors have begun to expect that the Fed will step in, probably with more bond buying, when it next meets in December. Testimony from Fed chair Jerome Powell before Congress on Tuesday and Wednesday, as well as U.S. labour market data this week will be closely watched for clues as to the central bank's thinking and the broad shape of the economy recovery. The Japanese yen was a fraction firmer at 104.07 per dollar on Monday and has gained a little over half a percent through November as the death toll from the pandemic climbed towards 1.5 million people. November also marks a sixth consecutive monthly gain for the Chinese yuan, which has soared some 9% from a low in May. That equals a similar run of monthly gains in 2013, but it is far larger in magnitude as China leads the world out of the coronavirus pandemic and capital inflows push the currency to new heights.
• Crude oil prices fell on Monday, amid investor jitters ahead of a meeting of producer group OPEC+ to decide whether to extend large output cuts to balance global markets, but vaccine hopes helped keep them on track to rise more than a fifth in November. However, both benchmarks are still set for a rise of more than 20% in November, the strongest monthly gains since May, boosted by hopes for three promising coronavirus vaccines to limit spread of the disease and thus support fuel demand. Analysts and traders also expect the OPEC and allies including Russia - the OPEC+ grouping - to delay next year's planned increase in oil output as a second COVID-19 wave has hit global fuel demand. OPEC+ previously agreed to raise output by 2 million barrels per day (bpd) in January - or about 2% of global consumption - after record supply cuts this year. The group held an initial round of talks on Sunday, but has yet to reach consensus on oil output policy for 2021 ahead of key meetings on Monday and Tuesday, four OPEC+ sources told Reuters. Monday's meeting begins at 1300 GMT. A lack of extension, representing a downside of $5 a barrel from current spot levels in the analysts' modelling, would further contribute to short-term price gyrations, they added. The winter wave of infections is expected to crimp global oil demand by 3 million bpd, they said, which would only partially be offset by heating and restocking demand in Asia. ANZ estimated that the oil market surplus could run as high as 1.5 million to 3 million bpd in first half of 2021 if OPEC+ did not extend cuts. Rising Middle East tension over the weekend, over events ranging from the assassination of Iran's top nuclear scientist to Islamic State's rocket attack on an oil refinery in northern Iraq propped up oil prices. In the United States, the number of operating oil and natural gas rigs has risen for the fourth month in a row as producers return to the wellpad with crude prices mostly trading over $40 a barrel since mid-June. China expanded factory activity at its fastest in more than three years in November, keeping on track to be the first major economy to fully recover from the coronavirus crisis. Oil was down on Monday morning in Asia as investors wait to see if OPEC+ will extend supply caps past January. Investors await the outcome of the Organization of Oil Exporting Countries and their allies two days of meetings that begin later today. Investors are wary of the outcome, as the usually monolithic bloc has been showing signs of internal dissent. The 180th Meeting of the OPEC Conference and the 12th OPEC and non-OPEC Ministerial Meeting have been expected to extend oil supply quota cuts beyond their current expiry date in January. However, several members, including the UAE and Iraq, have been pushing to allow the restrictions to expire, as their oil-dependent economies have been feeling the pinch of both low prices and low production volume. Beyond the OPEC+ issue, markets will take some positivity from China’s latest manufacturing data, the China Manufacturing Purchasing Managers Index has risen faster than expectations, at 52.1 as opposed to a forecast 51.5 U.S API weekly crude oil stock numbers are due out tomorrow.

Gold – XAU

Gold on Friday made its intraday high of US$1813.70/oz and low of US$1774.20/oz. Gold down 1.22% at US$1787.46/oz.

Technicals in Focus:

Technical in Focus: In daily charts, prices are below 50DMA (1899) and breakage above will call for 1916. 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 oversold territory and giving negative crossover to bearish stance for intraday trade.

Trading Strategy: Buy on Dips

Based on the charts and explanations above; buy above 1781-1725 with risk below 1725, targeting 1781-1790-1805 and 1821-1833. Sell below 1781-1833 keeping stop loss closing above 1833, targeting 1770-1763-1748 and 1738-1725.

Silver - XAG

Silver on Friday made its intraday high of US$23.31/oz and low of US$22.32/oz settled down by 2.815% at US$22.64/oz.

Technicals in Focus:

On daily charts, silver is sustaining below 50DMA (24.30), breakage above will lead to 25.00. MACD is below zero line and histograms are decreasing trend and it will bring bearish stance in the upcoming sessions. RSI is approaching neutral region, indicating buy signal for now. The Stochastic Oscillator is in oversold region and giving negative crossover to show downside move for the intraday trade.

Trading Strategy: Buy on Dips

Based on the charts and explanations above, Sell below 22.60-26.80 with stop loss above 26.80; targeting 22.00-21.60-21.20 and 20.50-20.00. Buy silver in between 23.20-21.60, targeting 23.90-24.95-25.65 and 26.05-26.40-26.80 with stop loss should be place on the breakage below 21.50.

Oil - WTI

Crude Oil on Friday made an intra‐day high of US45.72/bbl, intraday low of US$44.60/bbl and settled up by 1.695% to close at US$45.70/bbl.

Technicals in Focus:

On daily charts, oil is sustaining above its 100DMA i.e. 40.58 which is a support level and breakage below will call for 40.10. MACD is above 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 upside can be expected to reach the overbought region, which is highly probable.

Trading Strategy: Neutral to Buy

Based on the charts and explanations above; buy above 45.00-42.00 with risk daily closing below 42.00 and targeting 45.90-46.50-47.50 and 48.60-49.30. Sell in between 46.00-49.30 with stop loss at 49.30; targeting 44.60-44.00-43.60 and 43.00-42.50-41.50.

EUR/USD

EUR/USD on Friday an intraday low of US$1.1906/EUR, high of US$1.1928/EUR and settled the day up by 0.0478% to close at US$1.1962/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 1.1960-1.1635 with risk below 1.1600, targeting 1.1990-1.2010 and 1.2050-1.2100-1.2150. Sell below 1.1990-1.2110 targeting 1.1960-1.1905-1.1860 and 1.1790-1.1750-1.1710 with stop-loss at daily closing above 1.2010.

GBP/USD

GBP/USD on Friday made an intra‐day low of US$1.3286/GBP, high of US$1.3381/GBP and settled the day down by 0.311% to close at US$1.3313/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 1.3400-1.3550 with targets at 1.3340-1.3290-1.3200 and 1.3150-1.3100-1.3020 stop-loss should be 1.3550. Buy above 1.3340-1.2880 with targets 1.3400-1.3450 and 1.3480-1.3550 with stop loss closing below 1.2800.

USD/JPY

USD/JPY on Friday made intra‐day low of JPY103.90/USD and made an intraday high of JPY104.27/USD and settled the day dowm by 0.176% at JPY104.05/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 104.50-108.00 with risk above 108.00 targeting 103.90-103.10-102.50 and 102.00-101.50. Long positions above 103.10-101.00 with targets of 103.90-104.00-106.90 and 107.50-107.90-108.40 with stop below 105.00.