Daily Market Lookup

• The dollar climbed against its major peers on Monday with investors rushing for its relative safety as many countries tightened COVID-19 lockdowns. Sterling was on track for its biggest drop in three months against the dollar after Britain imposed tough new curbs to stem a fast-spreading new coronavirus strain. The currency also came under pressure as Brexit negotiators failed to find an agreement on the weekend, raising the risk of Britain crashing out of the European Union at the turn of the year with no deal. The negative sentiment overshadowed an agreement among U.S. congressional leaders for a $900 billion coronavirus aid package. The dollar's rebound comes after it sank to 2-1/2-year lows against major peers last week, driven by optimism that a widening vaccine rollout would revive global growth. Several European countries began closing their doors to travellers from Britain on Sunday amid alarm about the new coronavirus strain, compounding the uncertainty around trade come Jan. 1. The EU's fishing rights in British waters continues to be a particular sticking point in Brexit negotiations. British Health Minister Matt Hancock said on Sunday that the bloc should drop its "unreasonable demands". Even so, the mood could shift quickly, NAB's Catril warned, forecasting the pound could climb to $1.50 next year if a last-minute Brexit agreement gets done.
• The dollar was up on Monday morning in Asia, with investors turning to the safe-haven asset as many countries tightened restrictive measures against the COVID-19 virus. The U.K. was the latest country to imposed fresh, strict lockdowns in order to curb a new strain of the virus. This led to European neighbors, including France, Germany, Italy, the Netherlands, Ireland and Belgium closing their borders to travelers, and in some cases freight from the U.K. Other countries are also mulling similar bans. The rapidly spreading strain is causing alarm, overshadowing the news that the U.S. Congress reached a deal for a $900 billion COVID-19 aid package, with the House of Representatives to vote on the package later in day, followed by the Senate. The Food and Drug Administration also granted emergency use approval for Moderna Inc's (NASDAQ:MRNA) vaccine mRNA-1273 over the weekend. Meanwhile, talks for a post-Brexit trade deal with the European Union (EU) will continue later in the day, but both sides failed to reach an agreement. The EU’s fishing rights in British waters continues to be a particular sticking point, with U.K. Health Minister Matt Hancock on Sunday calling them “unreasonable demands” that should be dropped by the bloc. With the clock ticking towards the end-of-year deadline, the risk of the U.K. exiting the EU with no deal is rising. However, NAB’s Catril remained cautious about the greenback, although he forecasted that the pound could climb to $1.50 in 2021 should a last-minute Brexit agreement emerge.
• Oil prices dropped about 3% on Monday as a fast-spreading new coronavirus strain that has shut down much of the United Kingdom fuelled worries over a slower recovery in fuel demand amid tighter restrictions in Europe. Monday's declines came after oil prices marked seven straight weeks of gains last week as investors focused on the rollout of COVID-19 vaccines. British Prime Minister Boris Johnson will chair an emergency response meeting on Monday to discuss international travel and the flow of freight in and out of Britain as COVID-19 cases surged by a record number for one day. The headache comes as Johnson also seeks to hammer out a final accord on Brexit. The variant, which officials say is up to 70% more transmissible than the original, also prompted concerns about a wider spread, forcing several European countries to begin closing their doors to travellers from the United Kingdom. With progress in vaccine rollouts, money managers had raised their net long U.S. crude futures and options positions in the week to Dec. 15, according to the U.S. Commodity Futures Trading Commission (CFTC). The negative sentiment also overshadowed a weekend deal among U.S. congressional leaders for a $900 billion coronavirus aid package. Adding to pressure, the oil and gas rig count, an early indicator of future output, rose by eight to 346 in the week to Dec. 18, the highest since May, Baker Hughes said on Friday, as producers keep returning to the wellpad with crude prices trading above $45 a barrel since late NovemberMeanwhile, Russian Deputy Prime Minister Alexander Novak said on Saturday that global oil demand was still between 6 and 7 million barrels per day (bpd) below pre-crisis levels. Oil was down on Monday morning in Asia, slumping over the discovery of a new COVID-19 strain in the U.K. which could stall a nascent recovery in fuel demand and the global economy in general as tighter restrictions are introduced. The variant, which is reportedly 70% more transmissible than the original strain of the virus, has also prompted concerns about a wider spread. Countries including France, Germany, Italy, the Netherlands, Ireland, Canada, Argentina and Chile have banned travelers from U.K., with some also banning freight. Other countries are considering similar bans. U.K. Prime Minister Boris Johnson will chair an emergency response meeting later in the day to discuss international travel, with freight in and out of the country of particular concern. The country is also negotiating a post-Brexit trade deal with the European Union. News of the new COVID-19 strain overshadowed the deal reached in the U.S. Congress for a $900 billion COVID-19 bill. The House of Representatives will vote on the bill later in the day, followed by the Senate. Oil prices had marked seven straight weeks of gains last week as investors focused on the rollout of COVID-19 vaccines. Prices were also under pressure after the oil and gas rig count rose by eight to 346 in the week to Dec. 18 on Friday, its highest since May, according to Baker Hughes. The count was an indication that producers are continuing to return to the wellpad.

Gold – XAU

Gold on Friday made its intraday high of US$1889.61/oz and low of US$1877.35/oz. Gold down % at US$1881.43/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 1900-1849 with risk below 1849, targeting 1905-1918-1931 and 1940-1956. Sell below 1905-1956 keeping stop loss closing above 1956, targeting 1890-1881-1868 and 1860-1850.

Silver - XAG

Silver on Friday made its intraday high of US$26.11/oz and low of US$25.64/oz settled up by 0.960% at US$25.76/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 27.05-28.90 with stop loss above 28.90; targeting 26.50-26.05-25.65 and 24.95-24.50-23.90. Buy silver in between 26.50-24.60, targeting 27.05-27.65-28.00 and 28.50-28.90 with stop loss should be place on the breakage below 24.60.

Oil - WTI

Crude Oil on Friday made an intra‐day high of US49.40/bbl, intraday low of US$48.25/bbl and settled up by 1.324% to close at US$49.20/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 47.50-44.00 with risk daily closing below 44.00 and targeting 48.0-49.30-50.00 and 50.40- 50.90-51.50. Sell in between 48.00-51.30 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 Friday an intraday low of US$1.2224/EUR, high of US$1.2270/EUR and settled the day down by 0.0970% to close at US$1.2254/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 1.2150-1.1840 with risk below 1.1800, targeting 1.2190-1.2240-1.2275 and 1.2350-1.2400-1.2475. Sell below 1.2190-1.2475 targeting 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 Friday made an intra‐day low of US$1.3470/GBP, high of US$1.3589/GBP and settled the day down by 0.422% to close at US$1.3527/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 1.3300-1.3540 with targets at 1.3240-1.3200-1.3140 and 1.3115-1.3050 stop-loss should be 1.3600. Buy above 1.3240-1.3050 with targets 1.3300-1.3340-1.3400 and 1.3470-1.3540-1.3600 with stop loss closing below 1.3050.

USD/JPY

USD/JPY on Friday made intra‐day low of JPY103.03/USD and made an intraday high of JPY103.58/USD and settled the day up by 0.232% at JPY103.30/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.