Daily Market Lookup

• The dollar was down on Thursday morning in Asia, with investors continuing a retreat from the safe-haven asset after progress in U.S. stimulus measures and Brexit talks boosted risk appetite. Although temporarily boosted after the U.S. Federal Reserve handed down its policy decision on Wednesday, the index dropped below a new low of 90.126, a level that has not been seen since April 2018. Republicans and Democrats in Congress were reportedly “closing in on” approving a $900 billion stimulus bill on Wednesday, the most positive note seen in months. They are also working to pass a $1.4 trillion spending bill for the fiscal year beginning on Oct. 1. by Friday to prevent a government shutdown. Some investors said that the growing optimism in the market will lead to a weaker dollar. The pound was boosted by the progress in Brexit talks between the U.K. and the European Union, rising to $1.3553, a level not seen since May 2018, during the previous session. Although European Commission President Ursula von der Leyen said that the two sides were closer to a deal, she warned that success was not guaranteed. The euro was trading at $1.21945 earlier in the session after reaching $1.22120 overnight, its strongest level since April 2018. As it concluded its two-day policy meeting on Wednesday, the Fed vowed to keep pumping cash into financial markets until the U.S. economic recovery is secure. However, this promise of long-term help disappointed expectations for more immediate help as a second wave of COVID-19 cases in the country leads to an economic slide. Other central banks are also handing down policy decisions before the end of the week. The Bank of England and the Mexican, Swiss and Indonesian central bank will hand down their policy decisions later in the day, with the Bank of Japan and the Bank of Russia handing down their decisions on Friday. The dollar languished near fresh 2-1/2-year lows against its major rivals on Thursday as progress toward agreeing a U.S. stimulus package and a Brexit deal boosted risk appetite at the expense of the safest assets. Congressional negotiators were "closing in on" a $900 billion COVID-19 aid bill, lawmakers and aides said on Wednesday, with the tone the most positive it's been in months. Across the Atlantic, the European Union's chief executive said a deal with the UK was nearer, although success wasn't guaranteed. The Federal Reserve on Wednesday vowed to keep funnelling cash into financial markets until the U.S. economic recovery is secure, a promise of long-term help that fell short of some investors' hopes of an immediate move to shore up a recent pandemic-related slide.
• Oil hit a nine-month high on Thursday after government data showed a fall in U.S. crude stockpiles last week, while progress towards a U.S. fiscal stimulus deal and strong Asian demand also buoyed prices. U.S. crude inventories fell by 3.1 million barrels in the week to Dec. 11, the Energy Information Administration said, more than analysts' expectations of a 1.9-million-barrel drop. Also boosting oil prices, U.S. lawmakers edged closer to agreement on a $900 billion virus-relief spending package on Wednesday with top Democrats and Republicans sounding more positive than they have in months about getting something done. The United States on Thursday also expanded its campaign to deliver COVID-19 vaccine shots into the arms of doctors and nurses on the frontlines of a pandemic that has killed more than 2,500 Americans a day. Oil was up on Thursday morning in Asia, with a surprise drop in U.S. crude oil supply and hopes that the U.S. Congress will pass the latest stimulus measures easing fuel demand jitters. Crude oil inventory data from the U.S. Energy Information Administration (EIA) released on Wednesday showed a draw of 3.135 million barrels for the week to Dec. 11. This was larger than the 1.937-million-barrel draw in forecasts prepared by Investing.com and the 15.189-million-barrel build seen in the previous week. The EIA comes a day after the American Petroleum Institute reported a 1.973-million-barrel build in crude oil supplies. The EIA data also showed that refinery crude runs fell by 253,000 barrels per day in the past week and that refinery utilization rates fell by 0.8 percentage points in the week. Investors now await whether Senate Majority Leader Mitch McConnell, Republicans and Democrats will deliver on his promise “we’re gonna get there” for the latest stimulus measures. The two sides were reportedly “closing in on” approving a $900 billion stimulus bill on Wednesday. Work also continues on passing a $1.4 trillion spending bill for the fiscal year beginning on Oct. 1 by Friday to avert a government shutdown. Also boosting oil prices was the Federal Reserve’s policy decision, handed down on Wednesday at the conclusion of a two-day policy meeting. The decision confirmed the Fed’s strengthened commitment to support the U.S. economy by maintaining its asset purchase program until it sees “substantial further progress” in employment and inflation. With the U.S. continuing to grapple with a second wave of COVID-19 cases, Fed Chairman Jerome Powell added that said the case for fiscal stimulus is “very, very strong” On the vaccines front, an unprecedented COVID-19 immunization drive, which could see thousands more healthcare workers inoculated, continues despite some hiccups on the way. Meanwhile, Moderna Inc's (NASDAQ:MRNA) COVID-19 vaccine mRNA-1273 is expected to receive U.S. regulatory authorization by the end of the week.

Gold – XAU

Gold on Wednesday made its intraday high of US$1865.66/oz and low of US$1844.64/oz. Gold up 0.571% at US$1863.86/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 1849-1796 with risk below 1796, targeting 1868-1880 and 1890-1900. Sell below 1868-1900 keeping stop loss closing above 1900, targeting 1850-1829-1821 and 1811-1796-1790.

Silver - XAG

Silver on Wednesday made its intraday high of US$25.48/oz and low of US$24.42/oz settled up by 3.270% at US$25.25/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 26.05-27.70 with stop loss above 27.70; targeting 24.95-24.50-23.90 and 23.20-22.00-21.60. Buy silver in between 24.95-21.60, targeting 26.05-26.50-26.80 and 27.00-27.65 with stop loss should be place on the breakage below 27.65.

Oil - WTI

Crude Oil on Wednesday made an intra‐day high of US48.08/bbl, intraday low of US$47.31/bbl and settled up by 0.639% to close at US$48.03/bbl.

Technicals in Focus:

On daily charts, oil is sustaining above its 20DMA i.e. 45.74 which is a support level and breakage below will call for 45.74. 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 48.50-44.00 with risk daily closing below 44.00 and targeting 49.30-50.00-50.40 and 50.90-51.50. Sell in between 49.20-51.30 with stop loss at 51.30; targeting 48.50-47.50-46.60 and 45.10-44.60-44.00.

EUR/USD

EUR/USD on Wednesday an intraday low of US$1.2124/EUR, high of US$1.2211/EUR and settled the day up by 0.403% to close at US$1.2198/EUR.

Technicals in Focus:

On daily charts, prices are sustaining below 20DMA (1.2050), which become immediate resistance level, break above will target 1.1990. MACD is above zero line and histograms are increasing mode which will bring bullish view. Stochastic is in overbought territory and giving positive crossovers to signal for bullish outlook for intraday. 14D RSI is currently in overbought region and giving no directions to consider right now.

Trading Strategy: Neutral to Buy

Buy above 1.2190-1.1840 with risk below 1.1800, targeting 1.2240-1.2275-1.2350 and 1.2400-1.2475. Sell below 1.2240-1.2475 targeting 1.2190-1.2150-1.2090 and 1.2050-1.1990-1.1960 with stop-loss at daily closing above 1.2475.

GBP/USD

GBP/USD on Wednesday made an intra‐day low of US$1.3433/GBP, high of US$1.3553/GBP and settled the day up by 0.407% to close at US$1.3506/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 in between 1.3600-1.3710 with targets at 1.3540-1.3470-1.3400 and 1.3340-1.3290-1.3200 stop-loss should be 1.37. Buy above 1.3540-1.3290 with targets 1.3600-1.3660 and 1.3710-1.3800 with stop loss closing below 1.3290.

USD/JPY

USD/JPY on Wednesday made intra‐day low of JPY103.25/USD and made an intraday high of JPY103.91/USD and settled the day down by 0.197% at JPY103.44/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 103.80-108.00 with risk above 108.00 targeting 103.15-102.50-102.05 and 101.60-101.20. Long positions above 103.10-101.00 with targets of 103.80-104.50-105.00 and 105.40-105.90- with stop below 105.00.