Daily Market Lookup

• The dollar traded near 2 1/2-year lows against major peers on Tuesday as demand for the safest assets flagged amid progress toward agreeing U.S. fiscal stimulus and optimism for a Brexit deal. The greenback was near its weakest since mid-2018 against the euro and UK pound with U.S. lawmakers scurrying to ready $1.4 trillion in spending. A $908 billion bipartisan COVID-19 relief plan will be split into two packages, a person briefed on the matter said, raising hopes that at least a large part of the plan that already has bipartisan support will be approved. Across the Atlantic, European Union Brexit negotiator Michel Barnier said that sealing a trade pact with Britain was still possible, sowing hope that a deal can be reached with just days to avert a turbulent exit for the UK from the trade bloc at the end of the month. COVID-19 vaccine roll-outs in the United States and Britain also buoyed risk sentiment, but optimism was tempered by spikes in infection and death rates. London will go into a tighter lockdown amid the discovery of a new variant of the virus. An agreement on fiscal stimulus would also "undermine" the U.S. dollar, he wrote. A Chinese official said Tuesday that the country could make targeted policy adjustments as the economy improves.
• The dollar was down on Tuesday morning in Asia, with demand for safe assets falling as negotiations for both the latest U.S. stimulus measures and a post-Brexit trade deal continue. It was little changed, after trading near lows not seen since April 2018 during the previous session. Hopes were raised that a $908 billion bipartisan COVID-19 relief bill will be passed after it will reportedly be split into two separate packages. Vaccine optimism increased as the U.S. and the U.K. began inoculation programs for BNT162b2, the COVID-19 vaccine co-developed by Pfizer Inc and BioNTech SE Singapore's Health Sciences Authority also gave approved BNT162b2 on Monday, with the first shipments due in the city by the end of December, said Prime Minister Lee Hsien Loong.An agreement on fiscal stimulus would also “undermine” the dollar, the note added. However, the optimism was tempered by surging numbers of COVID-19 cases globally. New York City is bracing for its second full shutdown, with other parts of the country also facing possible tightened restrictions. European governments are also tightening measures, with London possibly seeing England’s toughest COVID-19 rules from Wednesday onwards as a new variant of the virus was discovered in the city. Data released in China earlier in the day showed that industrial production growing 7% year-on-year, against the 7% growth in forecasts prepared by Investing.com and October’s 6.9% growth. Retail sales grew 5% year-on-year in November, down from the forecast 5.2% growth but up from October’s 4.3% growth. The People’s Bank of China is likely to inject cash into the financial system for a fifth straight month on Tuesday via the medium-term lending facility. With some CNY600 billion ($91.66 billion) of one-year loans maturing in December, the central bank is widely expected to offer up to CNY800 billion in funding to banks The GBP/USD pair inched up 0.08% to 1.3333 European Union chief Brexit negotiator Michel Barnier was optimistic about reaching a “good, balanced” deal with the U.K., raising hopes that a deal can be reached before the end of the year. Meanwhile, the Federal Reserve leads a slew of central banks handing down policy decisions as it convenes later in the day and on Wednesday. The Bank of England and the Mexican, Swiss and Indonesian central banks will release their policy decisions on Thursday, with the Bank of Japan and the Bank of Russia handing down their decisions on Friday.
• Oil prices fell on Tuesday as tighter lockdowns in Europe and a forecast for a slower recovery in demand next year outweighed relief from vaccination rollouts and concerns about a flare-up of tension in the Middle East. London stepped up restrictions requiring bars and restaurants to close, as COVID-19 infection rates continued to rise sharply, which will dent fuel demand in the near term. Further marring the demand outlook, Italy said it was considering more stringent restrictions over the Christmas holidays, while most stores in Germany have been ordered to shut until Jan. 10, with little prospect of an easing early in the new year. OPEC on Monday pared its forecast for a recovery in oil demand in 202l by 350,000 barrels per day, due to the persistent impact of the pandemic, but said a rapid rollout of vaccines in major economies "provides potential upside for next year's growth forecast." In a sign of weaker demand, analysts expect data from the American Petroleum Institute on Tuesday and the Energy Information Administration on Wednesday to show that U.S. gasoline inventories rose by 1.6 million barrels last week, while distillate inventories, which include diesel and heating oil, rose by 400,000 barrels. Oil prices had found some support after a fuel transport ship at the Saudi Arabian port of Jeddah was hit by an explosion on Monday, but the kingdom's ministry of energy noted the incident did not cause any effect on supplies. The Organization of Petroleum Exporting Countries and allies, or OPEC+, added to the gloom by cutting its forecast for the oil demand recovery in 202l by 350,000 barrels per day, due to the persistent impact of the coronavirus pandemic. However, it added that a rapid rollout of vaccines in major economies “provides potential upside for next year’s growth forecast.” The cartel made the decision to limit production rises to 500,000 barrels per day starting in 2021 earlier in the month and will convene for its joint ministerial monitoring committee meeting, monitoring compliance among members, on Dec. 16. Another date on the calendar is Jan. 4, when OPEC+ will meet to discuss whether monthly increases in supply can continue. A report issued on Monday suggested that output could be incrementally restored over the next four months without triggering an oversupply in the market. Positive vaccine news, including for BNT162b2, and the ensuing optimism saw the black liquid rise to its highest level in nine months. There were hopes that the vaccines would lead to a recovery in global energy demand, even as the number of COVID-19 cases surged in various countries worldwide.

Gold – XAU

Gold on Monday made its intraday high of US$1841.35/oz and low of US$1819.08/oz. Gold down 0.769% at US$1826.24/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 1830-1796 with risk below 1796, targeting 1840-1849-1868 and 1880-1890-1900. Sell below 1839-1900 keeping stop loss closing above 1900, targeting 1829-1821-1808 and 1796-1790.

Silver - XAG

Silver on Monday made its intraday high of US$24.22/oz and low of US$23.65/oz settled down by 0.758% at US$23.80/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 24.50-26.80 with stop loss above 26.80; targeting 23.90-23.20-22.00 and 21.60-21.20-20.50. Buy silver in between 23.90-21.60, targeting 24.50-24.95-25.65 and 26.05-26.40-26.80 with stop loss should be place on the breakage below 21.50.

Oil - WTI

Crude Oil on Monday made an intra‐day high of US47.53/bbl, intraday low of US$45.84/bbl and settled up by 1.088% to close at US$47.13/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 46.50-42.00 with risk daily closing below 42.00 and targeting 47.50-48.00-48.60 and 49.30-50.00. Sell in between 47.50-50.30 with stop loss at 50.30; targeting 44.60-44.00-43.60 and 43.00-42.50-41.50.

EUR/USD

EUR/USD on Monday an intraday low of US$1.2114/EUR, high of US$1.2162/EUR and settled the day up by 0.067% to close at US$1.2112/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 12090-1.1840 with risk below 1.1800, targeting 1.2150-1.2190 and 1.2240-1.2275. Sell below 1.2150-1.2275 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 Friday made an intra‐day low of US$1.3133/GBP, high of US$1.3448/GBP and settled the day down by 0.256% to close at US$1.3323/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 1.3340-1.3600 with targets at 1.3290-1.3200 and 1.3150-1.3100 stop-loss should be 1.3550. Buy above 1.3290-1.2880 with targets 1.3340-1.3400-1.3480 and 1.3520-1.3600 with stop loss closing below 1.2800.

USD/JPY

USD/JPY on Monday made intra‐day low of JPY103.50/USD and made an intraday high of JPY104.09/USD and settled the day up by 0.0644% at JPY104.02/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 and 102.50-102.00. Long positions above 104.00-101.00 with targets of 105.00-106.90 and 107.50-107.90-108.40 with stop below 105.00.