Daily Market Lookup

• The dollar started the week just off a 20-year high against its peers on Monday, as investors sought safety due to fears about global growth that were highlighted by Monday's poor Chinese economic data, sending the Aussie dollar lower. They expect the euro to fall to parity against the dollar in the coming year. "Much weaker growth and much higher inflation leave the ECB facing one of the toughest policy challenges in G10 (central banks)," they said. Moves were sharper in the Australian dollar, which fell 0.68%, hurt by weaker-than-expeted Chinese data for April, when COVID-19 lockdowns took a heavy toll on consumption, industrial production and employment, adding to fears of a sharp slowdown in the second quarter He said investors were also watching for any more guidance from the Federal Reserve about the interest rate path, and the Russian-Ukraine war given the risks it poses to European growth. Markets are pricing in 50 basis point hikes at the Fed's next two meetings, according to CME's Fedwatch tool, but with the possibility of larger increases. Sterling, which has suffered along with the euro, was at $1.2244 on Monday, having dropped as low as $1.2156 last week, hurt by softer-than-expected first quarter GDP figures. In the coming week, Britain has labour market data, inflation and consumer confidence data. With yields pinned down in Japan, the yen is vulnerable to higher U.S. yields, but global growth fears have caused U.S. Treasury yields to pause their march higher.
• The dollar was down on Monday morning in Asia, starting the week near a 20-year high. However, investors are turning to the U.S. currency thanks to fears about global growth while cryptocurrency markets appeared to find some stability after a tumultuous week. Chinese data released earlier in the day showed that fixed asset investment grew 6.8% year-on-year, industrial production contracted 2.9% year-on-year, Chinese industrial production grew 4% year-on-year, and retail sales contracted 11.1% year-on-year in April 2022. The Chinese unemployment rate stood at 6.1%. Investors have flocked to the safe-haven greenback due to concerns about the U.S. Federal Reserve's ability to tame high inflation without causing a recession. However, worries about slowing growth arising from the war in Ukraine and the economic impact of China's lockdowns to curb its latest COVID-19 outbreak also persist. Events to watch this week included U.S. retail and production data due on Tuesday, as well as public remarks from several Fed officials. "The focus will be on any potential reiteration/pushback on the notion that 75-basis point rate hikes are off the table for now,” the note added. Markets are pricing in 50 basis point hikes at the Fed's next two meetings, according to CME's Fedwatch tool. However, the possibility of larger increases remains. The euro started the week near its lowest level since early 2017, thanks to the strong dollar and the European economy's exposure to the war in Ukraine that was perpetrated by the Russian invasion on Feb. 24. Top European Central Bank officials are also due to speak throughout the week.
• Gold was down on Monday morning in Asia, climbing up from a more than three-month low hit in the previous session. Lower U.S. Treasury yields kept demand for gold afloat above the $1,800 mark. The dollar, which normally moves inversely to gold, inched down on Monday but was just off a 20-year high. Concerns about economic growth saw investors turn towards the safe-haven greenback. Benchmark U.S. 10-year Treasury yields fell, and inflation will need to move lower for "several months" before U.S. Federal Reserve officials can safely conclude it has peaked, Cleveland Fed President Loretta Mester said Friday. Mester added that she would be ready to consider faster rates hike by the September 2022 Fed meeting if the data does not improve by then. Investors also await the minutes from the Reserve Bank of Australia's latest meeting, due on Tuesday.
• Oil prices fell on Monday, paring early gains as investors took profit following a surge in the previous session, albeit in the shadow of supply fear as the European Union prepares an import ban on Russian crude and with limited increase in OPEC output. Both benchmarks, which jumped about 4% last Friday, earlier climbed by more than $1 a barrel, with WTI reaching its highest since March 28 at $111.71. The European Union aims to agree a phased embargo on Russian oil this month despite concerns about supply in eastern Europe, four diplomats and officials said on Friday, rejecting suggestions of a delay or watering down proposals. Last week, Moscow slapped sanctions on several European energy companies, causing worries about supplies. Elsewhere OPEC+ - the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia - has been undershooting previously agreed plans for output increases due to under-investment in oilfields in some OPEC members and, more recently, losses in Russian output. The latest monthly report from OPEC showed its output in April rose by 153,000 barrels per day (bpd) to 28.65 million bpd, lagging the 254,000 bpd rise that OPEC is allowed under the OPEC+ deal Adding to pressure, China processed 11% less crude oil in April than a year earlier, with daily throughput falling to the lowest since March 2020 as refiners slashed operations on weaker demand due to widespread COVID-19 lockdowns. China's retail sales shrank 11.1% and industrial output fell 2.9% in April as lockdowns took a heavy toll on consumption, industrial production and employment, adding to fears the economy could shrink in the second quarter. Meanwhile, U.S. gasoline futures set an all-time high again on Monday as falling stockpiles fuelled supply concerns. [EIA/S]

Gold – XAU

Gold on Friday made its intraday high of US$1828.83/oz and low of US$1798.97/oz. Gold down 0.541% at US$1811.85/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 1820-1890 keeping stop loss closing above 1890, targeting 1801-1789-1780. Buy in between 1801-1769 with risk below 1769, targeting 1820-1831-1840 and 1848-1858-1868.

Silver - XAG

Silver on Friday made its intraday high of US$21.11/oz and low of US$20.44/oz settled down by 0.0189% at US$21.10/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 20.60-19.60, targeting 21.50-22.05-22.50 and 23.05--23.95-24.55-25.10 with stop loss should be place on the breakage below 19.50. Sell in between 21.50-23.20 with stop loss above 23.20; targeting 21.05-20.60 and 20.00-19.60.

Oil - WTI

Crude Oil on Thursday made an intra‐day high of US108.89/bbl, intraday low of US$104.75/bbl and settled up by 3.11% to close at US$108.29/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 108.00-113.25 with stop loss at 113.40; targeting 106.90-105.90-104.50 and 103.90-101.00-99.00. Buy above 106.90-99.00 with risk daily closing below 99.00 and targeting 108.00-108.90-110.30 and 111.60-113.25.

EUR/USD

EUR/USD on Friday made an intraday low of US$1.0348/EUR, high of US$1.0419/EUR and settled the day up by 0.113% to close at US$1.0413/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 1.0450-1.1145, targeting 1.0490-1.0450-1.0390 and 1.3050-1.0305-1.0250 with stop-loss at daily closing above 1.1150. Buy above 1.0390-1.0210 with risk below 1.0210, targeting 1.0450-1.0490-1.0550 and 1.0610-1.0690-1.0765.

GBP/USD

GBP/USD on Friday made an intra‐day low of US$1.2154/GBP, high of US$1.2264/GBP and settled the day up by 0.519% to close at US$1.2261/GBP.

Technicals in Focus:

On daily charts, prices are sustaining below 20DMA (1.2834) is become immediate resistance level. 14-D RSI is currently in oversold 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 1.2200-1.2070 with target 1.2240-1.2310-1.2420 and 1.2490-1.2545-1.2605 with stop loss closing below 1.2050. Sell in between 1.2240-1.2690 with targets at 1.2200-1.2150-1.2070 and 1.2010-1.1945 with stop loss should be 1.2690.

USD/JPY

USD/JPY on Friday made intra‐day low of JPY128.22/USD and made an intraday high of JPY129.44/USD and settled the day down 0.765% at JPY129.20/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 129.60-132.50 with risk above 132.50 targeting 129.00-128.10 and 126.90-126.10-125.00. Long positions above 129.00-126.40 with targets of 129.60-130.60-131.20 and 132.00-132.90-133.50 with stop below 126.40.