Daily Market Lookup

• The dollar was down on Wednesday morning in Asia, hovering near its lowest levels in two and a half years as cautious optimism that the U.S will restart stimulus talks improved risk appetite. U.S. Treasury Secretary Steve Mnuchin and House of Representatives Speaker Nancy Pelosi held their first talks for the latest stimulus measures since the Nov. 3 presidential elections. Mnuchin will also review the proposed $908 billion worth of measures laid out by a bipartisan group of senators and House members, Pelosi said. Meanwhile, Senate leader Mitch McConnell said on Tuesday that Congress should include a fresh wave of measures in a $1.4 trillion spending bill, aimed at heading off a government shutdown amid COVID-19. McConnell also teased a revised version of his own plan to fellow Republicans on the same day. However, some investors were unconvinced that the talks will lead to a consensus on the measures. U.S. Federal Reserve Chairman Jerome Powell expressed caution during Tuesday’s hearing before the Senate Banking Committee, warning that the U.S. economy remains in a damaged and uncertain state. Powell and Mnuchin also urged Congress to provide more help for small businesses amid a surging coronavirus pandemic and concern that relief from a vaccine may not arrive in time to keep them from failing. Powell is due to testify before Congress again later in the day, and the Fed meets for its policy meeting on Dec. 15 to 16. Weaker-than-expected manufacturing activity data for November, including the ISM Manufacturing Purchasing Managers Index (PMI), alongside speculation on whether the Fed will move to support the U.S. economy before COVID-19 vaccinations are made available, weighed on the dollar. The AUD got a boost from data released by the Australian Bureau of Statistics earlier in the day showing that GDP grew 3.3% quarter-on-quarter, above the 2.6% growth in forecasts prepared by Investing.com and the second quarter’s 7% contraction. The GDP shrank 3.8% year-on-year, above the forecast 4.4% contraction and the 6.3% contraction reported in the second quarter. The GBP/USD pair inched up 0.06% to 1.3422. The pound remained near a three-month high, with U.K. and European Union (EU) negotiators work to reach a Brexit trade deal before the following week. Although the talks have reportedly entered the “tunnel” stage, there were warnings on Tuesday that the talks remained deadlocked over issues such as fishing, governance rules and dispute resolution.
• The dollar stayed near a 2 1/2-year low on Wednesday as investors cautiously eyed developments in talks about further fiscal stimulus from the United States, while risk currencies held onto gains on improving risk appetite. The Euro and the Kiwi steadied after an overnight jump to their 2 1/2-year highs as the dollar broadly weakened. U.S. Treasury Secretary Steve Mnuchin and House of Representatives Speaker Nancy Pelosi held stimulus talks for the first time since the election, while a bipartisan group of senators and House members proposed $908 billion worth of coronavirus relief measures. Pelosi said in a statement after the talks that Mnuchin would review coronavirus relief proposals. U.S. Senate leader Mitch McConnell said on Tuesday that Congress should include a fresh wave of coronavirus stimulus in a must-pass $1.4 trillion spending bill aimed at heading off a government shutdown in the midst of a pandemic. Also weighing the safe-haven dollar was weaker-than-expected U.S. manufacturing activity data and speculation that the Federal Reserve will act to support the economy before vaccinations become available. Fed Chair Jerome Powell and Mnuchin urged Congress to provide more help for small businesses amid a surging coronavirus pandemic and concern that relief from a vaccine may not arrive in time to keep them from failing. The Fed meets to set policy on Dec. 15-16. The euro held ground against the dollar after its strong performance overnight as it hit the highest level since May 2018. It last fetched $1.2067. Analysts said the European Central Bank could act against a rapid rise of the currency. Sterling also remained near a three-month peak against the greenback after Times Radio said Brexit trade deal talks have entered the "tunnel" stage of negotiations. Separately, a senior British minister said on Tuesday there was still a chance of a no-trade deal Brexit as talks with the European Union had snagged on fishing, governance rules and dispute resolution. The risk-sensitive Aussie firmed to 0.7389 per dollar after the Australian GDP data was released, while the New Zealand dollar changed hands at $0.7071, holding steady near the highest level since April 2018 hit overnight.
• Oil was down on Wednesday morning in Asia, continuing a downward trend after a surprise build in U.S. crude oil inventories and uncertainty as to whether the Organization of the Petroleum Exporting Countries and allies (OPEC+) would extend its production cuts into 2021. Data released by the American Petroleum Institute on Tuesday showed a 4.146-million-barrel build for the week ending Nov. 27. Forecasts prepared by Investing.com had predicted a. 2.272-million-barrel draw, and the previous week saw a 3.8-million-barrel build. OPEC+ also left investors in limbo when it delayed the 12th OPEC and non-OPEC Ministerial Meeting to Dec. 3, where the cartel will decide on the production cuts. The meeting was originally due to have taken place on Dec. 1. Investors await OPEC+’s decision on whether to maintain or ease the current production cuts of 7.7 million bpd amid falling fuel demand, with global COVID-19 cases continuing to increase However, with the United Arab Emirates stating earlier in the week that although it would support a rollover, maintaining deep output reductions into 2021 would be challenging, some investors warned that building consensus would be a challenge. Meanwhile, Norway’s oil production cuts are due to ease on Dec. 31. The country, a non-OPEC+ member, had maintained the cuts since June and the supply increase once the cuts are eased could further dent the black liquid’s prices. Investors now await crude oil supply data from the U.S. Energy Information Administration, due later in the day.

Gold – XAU

Gold on Monday made its intraday high of US$1817.22/oz and low of US$1775.66/oz. Gold up 2.156% at US$1814.66/oz.

Technicals 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 1805-1763 with risk below 1760, targeting 1821-1830-1836 and 1849-1860-. Sell below 1821-1860 keeping stop loss closing above 1860, targeting 1805-1790-1781 and 1770.

Silver - XAG

Silver on Tuesday made its intraday high of US$22.75/oz and low of US$22.57/oz settled up by 6.10% at US$23.98/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 23.90-26.80 with stop loss above 26.80; targeting 23.20-22.00-21.60 and 21.20-20.50-20.00. 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 Tuesday made an intra‐day high of US45.74/bbl, intraday low of US$44.18/bbl and settled down by 1.693% to close at US$44.40/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: N eutral 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 Tuesday an intraday low of US$1.1923/EUR, high of US$1.2075/EUR and settled the day down by 1.1942% to close at US$1.2066/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 12050-1.1840 with risk below 1.1800, targeting 1.2100-1.2150-1.2190 and 1.2240-1.2275. Sell below 1.2100-1.2275 targeting 1.2050-1.1990-1.1960 and 1.1905-1.1860 1.1790 with stop-loss at daily closing above 1.2275.

GBP/USD

GBP/USD on Tuesday made an intra‐day low of US$1.3314/GBP, high of US$1.3440/GBP and settled the day up by 0.696% to close at US$1.3413/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 1.3440-1.3600 with targets at 1.3400-1.3340-1.3290 and 1.3200-1.3150-1.3100 stop-loss should be 1.3550. Buy above 1.3400-1.2880 with targets 1.3440- 1.3480-1.3520 and 1.3550-1.3600 with stop loss closing below 1.2800.

USD/JPY

USD/JPY on Tuesday made intra‐day low of JPY104.17/USD and made an intraday high of JPY104.57/USD and settled the day down by 0.0019% at JPY104.28/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 104.50-103.90-103.10 and 102.50-102.00. Long positions above 104.50-101.00 with targets of 105.00-106.90 and 107.50-107.90-108.40 with stop below 105.00.