Daily Market Lookup

• The dollar held near a two-year peak on Tuesday as concerns about the economic impact of China's COVID-19 lockdowns held up the greenback's safe-haven appeal and aggressive U.S. interest rate hike expectations kept bond yields elevated. China's financial hub of Shanghai has now been under strict lockdown to fight COVID for around a month, while Beijing overnight ramped up plans for mass-testing of 20 million people and fuelled worries about a looming lockdown. Hawkish comments by various central bank policymakers last week also raised the prospect of aggressive interest rate hikes. The most significant of these came from the U.S. Federal Reserve, which markets expect to raise rates by a half point at each of its next two meetings. China's offshore yuan was slightly higher however, at 6.5572 per dollar after the People's Bank of China said late on Monday it would cut the amount of foreign exchange banks must hold as reserves. Equity markets and U.S. bond yields also edged higher on Tuesday amid an improvement in overall risk sentiment. When market nerves offset optimism from the re-election of French President Emmanuel Macron. U.S. futures market data shows funds have amassed their biggest wager against the pound since October 2019, a bet now worth close to $5 billion. Researchers at crypto liquidity provider B2C2 said crypto market trading was currently correlated closely with equity markets, in the absence of any strong crypto-related themes.
• The dollar was down on Tuesday morning in Asia but was near a two-year high against the euro and an 18-month high versus the pound. Concerns about the economic impact of China's COVID-19 lockdowns and the aggressive pace of U.S. interest rate hikes gave the safe-haven dollar a boost. China's offshore yuan was steadier in early trading at 6.5770 per dollar, with the People’s Bank of China cutting the amount of money that banks need to have in reserve for their foreign currency holdings on Monday. The move helped the yuan rally from a year low of 6.609 per dollar on Monday. The COVID-19 lockdown in the Chinese city of Shanghai has now been in place for around a month. A mass-testing campaign currently underway in Beijing’s most populous district will be expanded and is stoking fears of a lockdown. Hawkish comments by various central bank policymakers during the previous week also raised the probability of aggressive interest rate policy tightening. The U.S. Federal Reserve is widely expected to hike rates by a half-point at each of its next two meetings. These concerns not only drove investors to the greenback but also caused equity markets to sell off heavily and U.S. Treasury yields to fall. Across the Atlantic, the pound hit its lowest since September 2020 overnight. Funds have amassed their biggest wager against the pound since October 2019, now worth close to $5 billion, U.S. futures market data showed.
• Gold rose on Tuesday as the dollar edged lower, with palladium also rebounding after concerns over reduced demand due to COVID lockdowns in China drove prices to a near one-month low in the previous session. Meanwhile, Russia told the world not to underestimate the considerable risks of nuclear war that it said it wanted to reduce and warned that conventional Western weapons were legitimate targets in Ukraine. Palladium prices fell nearly 13% on Monday to their lowest since end-March as fears of further COVID-19 lockdowns in key consumer China reduced demand prospects for the metal, which is used in vehicle exhausts to curb emissions. Nornickel, the world's largest palladium producer, said on Monday its first-quarter palladium production fell year-on-year, but kept its previous output forecast for 2022 unchanged despite difficulties posed by the Western sanctions on Moscow.
• Oil prices bounced on Tuesday, steadying after a sharp fall of 4% in the previous session as worries over China's fuel demand were soothed by the central bank's pledge to support an economy hit by renewed COVID-19 curbs. China will keep liquidity reasonably ample in financial markets, the People's Bank of China (PBOC) said in a statement on Tuesday, a day after the central bank announced a cut to banks' foreign exchange reserve ratio to support its economy. China's capital Beijing expanded its COVID-19 mass testing from one district this week to most of the city of nearly 22 million, as they braced for an imminent lockdown similar to Shanghai's stringent curbs. Separately, in a bearish signal for oil markets, five analysts polled by Reuters estimated on average that U.S. crude inventories increased by 2.2 million barrels in the week to April 22. Stockpiles of gasoline rose by about 500,000 barrels last week, and distillate inventories, which include diesel and heating oil, were expected to have decreased by 600,000 barrels. The poll was conducted ahead of the release of the inventory report from the American Petroleum Institute, an industry group, at 4:30 p.m. EDT (2030 GMT) on Tuesday. The official government Energy Information Administration data will be out on Wednesday. Analysts said that the supply side concerns over phasing out of Russian oil from the market will continue to support prices.

Gold – XAU

Gold on Monday made its intraday high of US$1934.31/oz and low of US$1891.40/oz. Gold down % at US$1897.73/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 1923-1970 keeping stop loss closing above 1970, targeting 1,900-1,889 and 1877-1868. Buy in between 1907-1868 with risk below 1868, targeting 1923-1938-1958 and 1970-1980-1996.

Silver - XAG

Silver on Monday made its intraday high of US$24.17/oz and low of US$23.39/oz settled down by 2.10% at US$23.62/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 23.70-22.05, targeting 23.95-24.55-25.10 and 25.70-26.50-26.75 with stop loss should be place on the breakage below 22.05. Sell in between 23.95-27.00 with stop loss above 27.00; targeting 23.50-23.05-22.85 and 22.50-22.05.

Oil - WTI

Crude Oil on Monday made an intra‐day high of US101.16/bbl, intraday low of US$95.04/bbl and settled down by 2.82% to close at US$98.30/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 99.25-102.95 with stop loss at 102.95; targeting 97.00-96.10-95.00 and 93.40-92.40. Buy above 98.00-92.40 with risk daily closing below 92.40 and targeting 99.25-100.60-101.0 and 102.10-102.95.

EUR/USD

EUR/USD on Monday made an intraday low of US$1.0696/EUR, high of US$1.0813/EUR and settled the day down by 0.840% to close at US$1.0712/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 1.0765-1.1145, targeting 1.0765-1.0720-1.0640 and 1.0600-1.0550 with stop-loss at daily closing above 1.1200. Buy above 1.0690-1.0450 with risk below 1.0450, targeting 1.0765-1.0820-1.0870 and 1.0900-1.0950-1.1105.

GBP/USD

GBP/USD on Friday made an intra‐day low of US$1.2822/GBP, high of US$1.3033/GBP and settled the day down by 1.469% to close at US$1.2837/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 1.2690-1.2500 with target 1.2750-1.2790-1.2840 and 1.2900-1.2970-1.3035-1.3110-1.3160 with stop loss closing below 1.2500. Sell in between 1.2750-1.3035 with targets at 1.2690 with stop loss should be 1.3300.

USD/JPY

USD/JPY on Monday made intra‐day low of JPY128.86/USD and made an intraday high of JPY127.51/USD and settled the day down 0.291% at JPY128.13/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 129.00-131.20 with risk above 131.20 targeting 128.10-127.00-126.40 and 124.90-124.00. Long positions above 128.10-124.00 with targets of 129.00-129.60-130.00 and 130.60-131.20 with stop below 124.00.