Daily Market Lookup

• The dollar was up on Thursday morning in Asia, finding some support as commodity currencies took a breather from their recent steep rally. However, a struggling Japanese yen from a recovery in the U.S. bond market. Thursday’s data showed that the U.K.’s consumer price index grew 0.8% month-on-month and 6.2% year-on-year in February. The producer price index input grew 14.7% year-on-year and 1.4% month-on-month, while the producer price output grew 0.8% month-on-month and 10.1% year-on-year. The yen hit a six-year low of 121.41 per dollar on Wednesday, remaining near that level in the Asian session. The Bank of Japan also released the minutes from its latest policy meeting earlier in the day, which showed that policymakers agreed that consumer inflation could overshoot expectations if companies pass on rising costs quicker than forecast. An ever-hawkish turn by the U.S. Federal Reserve has further widened that policy gap with its Japanese counterpart. San Francisco Fed President Mary Daly said both a 50 basis-point interest-rate hike and a decision to begin asset tapering could be warranted at the next Fed policy meeting in May 2022, while Cleveland Fed President Loretta Mester said she supported front-loading rate increases in 2022. But even an overnight steadying in the U.S. Treasury market after a few sessions of brutal selling did not provide much support to the yen.
• The dollar climbed on Wednesday while the euro weakened as oil prices shot higher again with U.S. President Joe Biden poised to announce, alongside European leaders, new sanctions against Russia during his trip to Europe. Biden is due to arrive in Brussels later on Wednesday on his first foreign trip since the war in Ukraine began, and will meet NATO and European leaders in an emergency summit at the Western military alliance's headquarters. Sources said the U.S. package would include measures targeting Russian members of parliament. Prices for commodities such as oil and wheat have climbed as tensions in Ukraine have escalated, putting additional upward pressure on already high inflation due to supply chain bottlenecks. Rising inflation has led many central banks, including the U.S. Federal Reserve, to take measures to rein in prices, such as by raising interest rates. Crude prices were up more than 5% on Wednesday, supported by disruption to Russian and Kazakh crude exports. Federal Reserve Chair Jerome Powell raised the possibility of raising interest rates by more than 25 basis points at upcoming meetings, a more aggressive stance echoed by other policymakers, which has supported the greenback and helped boost the yield on the benchmark 10-year U.S. Treasury note to more than 2.4%. On Wednesday, San Francisco Fed President Mary Daly and Cleveland Fed President Loretta Mester became the latest Fed policymakers to indicate a bigger hike was in the offing at the central bank's May meeting. Jefferies on Wednesday updated its Fed forecast in light of Powell's comments and now sees a 50-basis-point rate hike at both the May and June meetings, followed by 25-basis-point hikes at the remaining meetings of 2022. Inflation in Britain shot up faster than expected last month to hit a new 30-year high at a 6.2% year-over-year rise. British finance minister Rishi Sunak cut taxes for workers and reduced a duty on fuel on the heels of the inflation data as he sought to soften a severe cost-of-living squeeze against the backdrop of fast-rising prices and slowing economic growth. The yen has been weak against the dollar recently, with the currency slipping to a new six-year low of 121.40 per dollar as the path of their respective central banks has diverged. Bank of Japan Governor Haruhiko Kuroda said on Tuesday the central bank must maintain ultra-loose monetary policy as recent cost-push inflation could hurt the economy. Gold was up on Thursday morning in Asia. The U.S. currency remained unchanged as the dollar was up and yields remained near multi-year peaks, offsetting support from an escalation in the Ukraine war.
• The dollar, which normally moves inversely to gold, edged up on Thursday. The benchmark U.S. 10-year Treasury yield remained near Wednesday's peak, the highest since May 2019. U.S. President Joe Biden could announce further sanctions on Russia later in the day, in response to the latter's invasion of Ukraine one month ago on Feb. 24. Also contributing to high prices and volatility in the oil market, Russian President Vladimir Putin warned that he could switch certain gas sales to roubles. The move sent European futures soaring, as concerns rose of an exacerbated energy crunch that could impact deals that amount to hundreds of millions of dollars every day. In Asia Pacific, the Bank of Japan (BOJ) released the minutes from its latest policy meeting earlier in the day. The minutes showed that policymakers agreed that consumer inflation could overshoot expectations if companies pass on rising costs quicker than forecast. BOJ’s insistence on a more dovish tone contrasted with the U.S. Federal Reserve’s more aggressive approach. San Francisco Fed President Mary Daly said both a 50 basis-point interest-rate hike and a decision to begin asset tapering could be warranted at the next Fed policy meeting, while Cleveland Fed President Loretta Mester said she supported front-loading rate increases in 2022.

Gold – XAU

Gold on Wednesday made its intraday high of US$1948.34/oz and low of US$1915.52/oz. Gold up 1.186% at US$1943.97/oz.

Technicals in Focus:

In daily charts, prices are above 200DMA (1809) and breakage below will call for 1790. MACD is above zero line and histograms are also increasing trend and it will bring upward stance in the upcoming sessions. RSI is in overbought region and more upside is expected before it gets stretched. Stochastic Oscillator is in neutral territory and giving negative crossover to bearish stance for intraday trade.

Trading Strategy: Sell on Strength

Sell below 1950-1974 keeping stop loss closing above 1973, targeting 1941-1925-1911 and 1900-1888-1877. Buy in between 1941-1877 with risk below 1877, targeting 1950 and 1958-1965-1973.

Silver - XAG

Silver on Tuesday made its intraday high of US$25.21/oz and low of US$24.95/oz settled up by 1.512% at US$25.10/oz.

Technicals in Focus:

On daily charts, silver is sustaining below 100DMA (26.62), breakage above will lead to 27.60. 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 positive crossover to show upside move for the intraday trade.

Trading Strategy: Buy on Dips

Buy in between 24.80-22.90, targeting 25.10-25.70-26.50 and 26.75-27.50-27.80 with stop loss should be place on the breakage below 22.90. Sell in between 25.40-27.90 with stop loss above 27.90; targeting 25.40-24.80 and 24.40-23.90-23.40.

Oil - WTI

Crude Oil on Wednesday made an intra‐day high of US114.73/bbl, intraday low of US$107.80/bbl and settled up by 5.19% to close at US$113.64/bbl.

Technicals in Focus:

On daily charts, oil is sustaining above its 20DMA i.e. 68.50 which is a support level and breakage below will call for 65.40. MACD is above zero line and histograms are in increasing mode 0will bring bullish stance in the upcoming sessions. The Stochastic Oscillator is in neutral 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 Sell

Sell in between 114.00-117.55 with stop loss at 117.55; targeting 113.50-112.90-112.00 and 110.10-109.40. Buy above 113.50-109.40 with risk daily closing below 109.40 and targeting 114.00-114.90-115.70 and 116.50-117.55.

EUR/USD

EUR/USD on Wednesday made an intraday low of US$1.0963/EUR, high of US$1.1042/EUR and settled the day down by 0.211% to close at US$1.1005/EUR.

Technicals in Focus:

On daily charts, prices are sustaining above 50DMA (1.1191), which become immediate support, break below will target 1.1270. 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 neutral region and giving no directions to consider right now.

Trading Strategy: Neutral to Sell

Sell below 1.1090-1.1260, targeting 1.1010-1.0850-1.0720 and 1.0640- 1.0600-1.0520 with stop-loss at daily closing above 1.1200. Buy above 1.1010-1.0520 with risk below 1.0520, targeting 1.1050-1.1105-1.1100-1.1270.

GBP/USD

GBP/USD on Wednesday made an intra‐day low of US$1.3174/GBP, high of US$1.3298/GBP and settled the day down by 0.429% to close at US$1.3201/GBP.

Technicals in Focus:

On daily charts, prices are sustaining above 100DMA (1.3760) 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 overbought territory and giving positive crossover to confirm bullish stance. MACD is above zero line but histograms are increasing lead to upward movement.

Trading Strategy: Neutral to Buy

Based on the charts and explanations above; buy in between 1.3200-1.2850 with target 1.3250-1.3290-1.3320 and 1.3360-1.3400 with stop loss closing below 1.2850. Sell in between 1.3240-1.3400 with targets at 1.3200-1.3140-1.3035 and 1.2970-1.2925-1.2850 with stop loss should be 1.3300.

USD/JPY

USD/JPY on Wednesday made intra‐day low of JPY120.58/USD and made an intraday high of JPY121.02/USD and settled the day up 1.135% at JPY121.12/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 121.10-123.00 with risk above 122.00 targeting 120.10-119.00-118.00 and 117.50-116.80-116.10. Long positions above 120.10-115.50 with targets of 119.10-120.00-120.50 and 121.00-122.00 with stop below 115.50.