Daily Market Lookup

• The euro edged higher on Thursday extending a run of gains on hopes for progress in Ukraine peace talks, while investors’ focused on the European Central Bank’s potential monetary tightening after strong inflation data. Analysts remain cautious about further euro gains as Russian forces prepared for new attacks in the east of Ukraine, while no quick resolution is expected from peace talks that will resume on Friday. Money markets are currently pricing in an around 90% chance of 20 basis points (bps) of ECB rate hikes by July 2022 and 65 bps by year-end. European Central Bank President Christine Lagarde said on Wednesday inflation should stop rising after data in Spain and Germany showed a higher-than-expected rise in consumer prices.
• The U.S. dollar edged lower Thursday ahead of key employment data, while the euro held at a one-month high against the greenback on hopes the Ukraine/Russia conflict is heading towards a de-escalation phase. The U.S. dollar received a boost Wednesday after data from the ADP Research Institute showed that U.S. companies employed an additional 455,000 people in March, growth which is consistent with the Federal Reserve’s view that the labor market is robust. This comes ahead of Thursday’s weekly initial jobless claims data and, more importantly, Friday’s monthly official jobs report. The U.S. Federal Reserve lifted interest rates earlier this month and signaled a series of increases ahead to combat soaring inflation, so long as the economy didn’t retreat into recession, as an inverted yield curve has warned about. The strength of the labor market suggests the Fed will feel confident about going ahead with more interest rate hikes in the months ahead, to the benefit of the dollar. Elsewhere, EUR/USD rose 0.1% to 1.1172, with the single currency gaining around 1.6% this week, climbing to its highest level in a month, on increasing hopes that the conflict in Ukraine could be approaching a conclusion. The peace talks between Ukraine and Russia in Istanbul earlier in the week raised hopes of a breakthrough. And although Russia has continued attacks in the east of the country, its promise to scale down military operations around Kyiv has raised hopes that the conflict could be entering a new phase involving the de-escalation of the violence. New peace talks are also scheduled for Friday. GBP/USD rose 0.1% to 1.3140, helped by data showing Britain's economy grew more quickly than previously thought in the last three months of 2021, with GDP increasing by 1.3% in the fourth quarter from the previous three-month period, stronger than a preliminary estimate of growth of 1.0%.
• Oil prices plunged on Thursday on news that the United States was considering the release of up to 180 million barrels from its Strategic Petroleum Reserve, the largest in the near 50-year history of the SPR. Brent crude futures for May fell $4.87, or 4.3%, to $108.58 a barrel by 0855 GMT. The May contract expires on Thursday and the most actively traded June futures were down $5.08 at $106.36, having earlier slid by more than $6. U.S. President Joe Biden will speak later on Thursday regarding his administration's actions aimed at lowering gasoline prices that have risen to record highs since Russia began its invasion of Ukraine. International Energy Agency (IEA) member countries are due to meet on Friday at 1200 GMT to decide on a potential collective oil release, a spokesperson for New Zealand's energy minister said on Thursday. The Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia meet on Thursday and are expected to stick with a planned increase in their May output target. Oil rose by around 3% on Wednesday as peace talks stalled between Ukraine and Russia, the world's second-largest oil exporter. Western financial sanctions imposed on Moscow over its invasion of Ukraine have disrupted its crude oil and oil product exports. Russia calls its actions in Ukraine a "special operation".
• Gold prices fell in range-bound trade on Thursday, although the safe-haven metal was set for its biggest quarterly gain since September 2020, as the Russia-Ukraine conflict dampened risk appetite and lifted bullion's appeal. Ukrainian forces are preparing for new Russian attacks in the east of the country as Moscow builds up its troops there after suffering setbacks near the capital Kyiv, President Volodymyr Zelenskiy said on Thursday. Bullion is considered a safe store of value during times of political and financial uncertainty, and is viewed as a hedge against inflationary pressures. However, rising interest rates increase the opportunity cost of holding non-yielding gold.

Gold – XAU

Gold on Wednesday made its intraday high of US$1983.44/oz and low of US$1915.77/oz. Gold down 0.673% at US$1932.34/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 Wednesday made its intraday high of US$25.05/oz and low of US$24.85/oz settled down by 0.335% at US$24.85/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 26.00-27.90 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 US107.67/bbl, intraday low of US$103.49/bbl and settled up by 2.31% to close at US$106.34/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 103.00-107.90 with stop loss at 109.90; targeting 102.00-101.40-104.00 and 104.60-106.20-107.50. Buy above 102.00-98.20 with risk daily closing below 98.20 and targeting 102.90-104.00-104.60 and 106.20-107.00 and 107.75-109.90.

EUR/USD

EUR/USD on Wednesday made an intraday low of US$1.0779/EUR, high of US$1.1170/EUR and settled the day up by 0.645% to close at US$1.1157/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 1.1145-1.1330, targeting 1.1105-1.1025-1.0850 and 1.0720-1.0640- 1.0600 with stop-loss at daily closing above 1.1200. Buy above 1.1105-1.0880 with risk below 1.0880, targeting 1.1145-1.1190-1.1265 and 1.1295-1.1330.

GBP/USD

GBP/USD on Wednesday made an intra‐day low of US$1.3050/GBP, high of US$1.3158/GBP and settled the day down by 0.0244% to close at US$1.3092/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 1.3070-1.2850 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 JPY121.66/USD and made an intraday high of JPY123.19/USD and settled the day down 0.950% at JPY121.66/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 124.00-126.90 with risk above 126.90 targeting 123.50-123.00-121.00 and 120.50-120.10-119.00. Long positions above 121.00-118.10 with targets of 122.00-123.00-124.00 and 124.90-125.50-126.00 with stop below 115.50.