Daily Market Lookup

• The dollar edged higher in early European trading Friday as Treasury yields returned to their recent highs, but it still looks set to record its first weekly fall in three. The euro and sterling were also in focus after the ECB meeting and the release of U.K. growth data. The index has dropped around 0.4% this week, but has firmed around 2% this year to date as it tracked benchmark 10-year Treasury yields from below 1% to as high as 1.62% at the end of last week. On Friday, the yield stood at around 1.59%, climbing from the 1.55% level seen Thursday. U.S. President Joe Biden signed a $1.9 trillion stimulus package into law late Thursday, a day after the House of Representative gave its final approval, meaning that checks for $1,400 will arrive on the doorsteps of many Americans in the near future. The dollar, along with U.S. Treasury yields, has been rising steadily due to expectations that the Federal Reserve's loose monetary policy and fiscal stimulus will stoke inflation. While this week’s consumer prices data dampened those expectations, recent employment numbers showed a strongly recovering labor market, with last week’s payrolls growing much more strongly than expected and Thursday’s jobless claims fell to the lowest level since the pandemic started. Elsewhere, EUR/USD fell 0.3% to 1.1945 after the European Central Bank said on Thursday it would accelerate its emergency bond purchases over the next quarter to combat rising European bond yields. Additionally, GBP/USD fell 0.3% to 1.3943 after the latest growth data showed Britain's economy shrank by 2.9% in January from December as the country went back into a coronavirus lockdown. Although this was a smaller drop than expected, it still indicated that the economy was 9.2% smaller than in January last year The Bank of England stated last week that Britain’s economy is likely to shrink 4% in the first quarter of 2021, hit by the latest Covid-related lockdowns as well as post-Brexit trade disruptions.
• The U.S. dollar climbed from a near one-week low on Friday as bond yields inched higher, but it looked set for its first weekly fall in three against a basket of its major rivals as riskier currencies drew support from calmer market sentiment. The euro traded at about $1.1965, holding firm after the European Central Bank, as widely expected, said on Thursday it would accelerate its emergency bond purchases over the next quarter. The dollar index has firmed more than 1.6% this year as it tracked benchmark 10-year Treasury yields from below 1% to as high as 1.625% at the end of last week. On Friday, the yield stood at around 1.55%. Focus next week will be on the U.S. Federal Reserve's policy meeting after Chair Jerome Powell refrained from raising concerns about higher bond yields earlier this month. The Bank of Japan may tweak a three-tier deposit system at next week's policy review to exempt a larger portion of reserves from negative interest rates, sources told Reuters. The commodity-linked Australian and New Zealand dollars retreated from near one-week highs, but were still on track to post their first weekly gains in three as improving economic data lifted metals prices. The dollar was up on Friday morning in Asia but remained near a one-week low as calmer bond markets boosted investor sentiment and risk appetite overall. The dollar index kept near the 91.364 level reached during the previous session for the first time since Feb. 4. It has dropped around 0.6% during the past week, after retreating from a more than three-month high of 92.506 reached on Tuesday The index remains 1.6% higher in 2021, following ten-year Treasury yields that rose from below 1% to as high as 1.625% at the end of the previous week. Yields have since retreated to around 1.5% after auctions of ten-year Treasury benchmark and 30-year notes were successfully concluded. Investors cheered as U.S. President Joe Biden signed a $1.9 trillion stimulus package into law, ahead of schedule and a day after the House of Representative gave its final approval on Wednesday. On the data front, Wednesday’s core consumer prices data also eased fears that massive fiscal stimulus and continuous ultra-easy monetary policy could lead to runaway inflation. Fewer Americans claimed unemployment benefits than expected, with 712,000 claims filed over the past week against the 725,000 claims in forecasts prepared by Investing.com and the 754,000 claims recorded during the previous week. The euro also traded close to a one-week high, after the European Central Bank pledged to accelerate money-printing to keep yields down as it handed down its policy address on Thursday.
• Oil was down Friday morning in Asia. The black liquid gave up some gains from the previous session even as investors cheered the last step of the U.S.’ stimulus package that drove fuel demand recovery hopes up. U.S. President Joe Biden signed the $1.9 trillion package into law on Thursday, a day after the House of Representatives gave its final approval to the bill. Investors also remained optimistic as the advent of spring saw more cars on the road. Vehicle miles driven on American highways reportedly increased 10% during the past week from the previous seven days, while U.K. road use also increased. The Organization of Petroleum Exporting Countries (OPEC), however, struck a cautious note about demand outlook on Thursday, as it lowered estimates for crude that it will need to pump over the next two quarters. However, the decision made by OPEC and its allies (OPEC+) earlier in the month to continue current output cuts also continues to tighten the market, and the global COVID-19 vaccine rollout continues to drive optimism over fuel demand recovery. Oil is closing what has been a volatile week, with prices rallying to their highest point since October 2018 on Monday after the attack on a Saudi Arabian facility. Prices pulled back as the week progressed, however, and are poised to post a modest weekly loss. The prompt timespread for Brent futures was 63 cents a barrel in backwardation on Thursday, compared with 54 cents during the previous week.

Gold – XAU

Gold on Thursday made its intraday high of US$1739.77/oz and low of US$1719.17/oz. Gold up 0.257% at US$1721.84/oz.

Technicals in Focus:

In daily charts, prices are below 200DMA (1858) 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 1690-1643 with risk below 1643, targeting 1715-1730-1747 and 1764-1776-1787. Sell below 1715-1776 keeping stop loss closing above 1776, targeting 1700-1684-1675 and 1675-1650.

Silver - XAG

Silver on Thursday made its intraday high of US$26.44/oz and low of US$25.82/oz settled up by 0.194% at US$26.10/oz.

Technicals in Focus:

On daily charts, silver is sustaining below 100DMA (25.40), 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 in between 26.05-29.50 with stop loss above 30.00; targeting 25.05-24.45 and 24.00-23.50-23.00. Buy silver in between 25.05-23.60, targeting 26.05-26.50-27.25 and 28.20-28.90-29.50 with stop loss should be place on the breakage below 24.60.

Oil - WTI

Crude Oil on Thursday made an intra‐day high of US66.15/bbl, intraday low of US$64.47/bbl and settled down by 0.301% to close at US$65.82/bbl.

Technicals in Focus:

On daily charts, oil is sustaining above its 20DMA i.e. 48.34 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 65.40-62.00 with risk daily closing below 62.00 and targeting 66.00-66.70-67.50 and 68.00-69.00. Sell in between 65.90-69.00 with stop loss at 69.00; targeting 65.40-64.70-63.50 and 62.90-62.00-61.40.

EUR/USD

EUR/USD on Thursday an intraday low of US$1.1914/EUR, high of US$1.1989/EUR and settled the day up by 0.469% to close at US$1.1983/EUR.

Technicals in Focus:

On daily charts, prices are sustaining below 100DMA (1.2028), which become immediate resistance level, break above will target 1.2090. MACD is above zero line and histograms are increasing mode which will bring bullish view. Stochastic is in oversold territory and still giving negative crossovers to signal for bearish 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 1.1925-1.1705 with risk below 1.1700, targeting 1.1960-1.2015-1.2090 and 1.2150-1.2190-1.2300. Sell below 1.1960-1.2190 targeting 1.1925-1.1850-1.1800 and 1.1760-1.1705 with stop-loss at daily closing above 1.2340.

GBP/USD

GBP/USD on Thursday made an intra‐day low of US$1.3911/GBP, high of US$1.3995/GBP and settled the day up by 0.445% to close at US$1.3987/GBP.

Technicals in Focus:

On daily charts, prices are sustaining above 20DMA (1.3610) 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 1.3950-1.4200 with targets at 1.3865-1.3800-1.3745 and 1.3700-1.3650-1.3565 stop-loss should be 1.4200. Buy above 1.3890-1.3570 with targets 1.3900-1.3940-1.3990 and 1.4040-1.4100-1.4200 with stop loss closing below 1.3570.

USD/JPY

USD/JPY on Thursday made intra‐day low of JPY108.34/USD and made an intraday high of JPY108.80/USD and settled the day up by 0.116% at JPY108.48/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 109.25-111.00 with risk above 111.00 targeting 108.50-107.50-106.90 and 106.10-105.60-105.00. Long positions above 108.50-106.00 with targets of 109.00-109.90 and 110.50-111.00 with stop below 106.00.