Daily Market Lookup

• The dollar nursed last week's losses on Monday and was headed for its first monthly drop in five months as investors have scaled back bets that rising U.S. rates will spur further gains and as fears of a global recession have receded a little. The week ahead is full of data that could provide clues on the outlook for global growth, U.S. interest rates and the dollar with Chinese Purchasing Managers' Index figures, U.S. jobs numbers and growth data in resource bellwether Australia. Trade was likely to be lightened through Monday as U.S. stock and bond markets close for the Memorial Day public holiday. Early in the Asia session the dollar was a fraction weaker on the euro at $1.0728, just above a five-week low, having dropped about 1.5% on the common currency last week Shanghai said on Sunday "unreasonable" curbs on businesses will be removed from June 1, while Beijing reopened parts of its public transport as well as some malls. Most analysts are wary of calling an outright end to the recent dollar strength. But positive U.S. consumer data and the easing lockdowns in China is helping kindle hopes about global growth, which tends to support exporters' currencies at the dollar's expense. Investors have also seized on hints the Federal Reserve, once it has hiked aggressively over the next two months, might then take a breather.
• The dollar was down on Monday morning in Asia, nursing the previous week’s losses and set for its first monthly drop in five months. Investors have reduced bets that rising U.S. rates will drive further gains and as fears of a global recession have subsided a little. Data due throughout the week could also provide hints on the global economic outlook. China’s manufacturing and non-manufacturing purchasing managers indexes, alongside the Eurozone consumer price index, are due on Tuesday. The U.S. will release its May employment report, including non-farm payrolls, on Friday. Markets are likely to be light on Monday, with U.S. stock and bond markets closed for the Memorial Day holiday. The dollar was a fraction weaker against the euro at $1.0728 earlier in the Asian session, just above a five-week low, after falling about 1.5% on the single currency during the previous week. The Chinese yuan held steady in offshore trade, boosted by the potential easing of COVID-19 measures in some cities. Shanghai said on Sunday "unreasonable" curbs on businesses will be removed from June 1, 2022, while Beijing reopened parts of its public transport as well as some malls. Although other investors are wary of calling an outright end to the recent dollar strength, positive U.S. consumer data and the easing lockdowns in China are improving sentiment about global growth. Investors are already betting that the U.S. Federal Reserve, once it has hiked interest rates aggressively over the next two months, could take a pause afterward.
• Gold was up on Monday morning in Asia, firming in volatile trading. A weaker dollar gave the yellow metal a boost, but a move towards riskier assets in Asia capped gains. Federal government offices, stock and bond markets, and the Federal Reserve will be closed for the Memorial Day holiday in the U.S. on Monday. Gold has had a mostly positive showing since hitting an over three-month low of $1,786.60 per ounce on May 16, 2022. It is set for a second consecutive monthly fall for the first time since March 2021, down about 2.4% so far. Asian shares followed their U.S. counterparts higher, while the dollar was near five-week lows, with investors betting on an eventual slowdown in U.S. monetary tightening, albeit after sharp hikes in June and July 2022. In other precious markets, silver edged up 0.1%, platinum firmed 0.1% to $954.51, and palladium rose 0.8%.was a deal on all issues. Meanwhile, the Organization of the Petroleum Exporting Countries and allies (OPEC+) is set to leave 2021’s oil production deal unchanged when it meets on June 2. The cartel could raise July output targets by 432,000 barrels per day, rebuffing Western calls for a faster increase to lower surging prices, six OPEC+ sources told Reuters.
• Oil prices rose on Monday, hitting their highest in more than two months, as traders waited to see whether the European Union would reach an agreement on banning Russian oil imports. The EU is due to meet on Monday and Tuesday to discuss a sixth package of sanctions against Russia for its invasion of Ukraine, actions Moscow calls a "special military operation". EU governments failed to agree on an embargo on Russian oil on Sunday but will continue talks on a deal to ban seaborne deliveries of Russian oil while allowing deliveries by pipeline, ahead of the summit on Monday afternoon, officials said. Any further ban on Russian oil would tighten a crude market already strained for supply amid rising demand for gasoline, diesel and jet fuel ahead of the peak summer demand season in the United States and Europe.
• Sky-high refining margins for diesel and gasoline in Europe and the United States have sent prices for some types of physical crude oil to record highs, according to traders. Underscoring market tightness, the Organization of the Petroleum Exporting Countries and allies including Russia, together called OPEC+, are set to rebuff Western calls to speed up increases in their additions to oil output when they meet on Thursday. They will stick to existing plans to add 432,000 barrels per day in July, six OPEC+ sources told Reuters.The oil market was also on edge after Iran on Friday said its navy had seized two Greek oil tankers in retaliation for the confiscation of Iranian oil by the United States from a tanker held off the Greek coast. Crude prices are also finding support from a weaker U.S. dollar, and China's easing of virus related restrictions, said Sunil Katke, head of commodities retail business at Kotak Securities. A weaker dollar makes oil less expensive for importers holding other currencies.

Gold – XAU

Gold on Thursday made its intraday high of US$1861.88/oz and low of US$1847.85/oz. Gold up 0.112% at US$1853.68/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 1859-1890 keeping stop loss closing above 1890, targeting 1851-1831-1820 and 1801-1789-1780. Buy in between 1851-1769 with risk below 1769, targeting 1858-1868-1879 and 1890-1900.

Silver - XAG

Silver on Friday made its intraday high of US$22.43/oz and low of US$2193/oz settled down by 0.500% at US$22.10/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 20.90-19.60, targeting 21.60-22.05-22.50 and 23.05--23.95-24.55-25.10 with stop loss should be place on the breakage below 19.50. Sell in between 21.60-23.75 with stop loss above 23.75; targeting 21.50-21.05-20.60 and 20.00-19.60.

Oil - WTI

Crude Oil on Friday made an intra‐day high of US114.11/bbl, intraday low of US$111.70/bbl and settled up by 0.676% to close at US$113.80/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 115.80-119.60 with stop loss at 119.50; targeting 114.50-113.25-112.50 and 111.60-110.30-109.00. Buy above 114.50-106.60 with risk daily closing below 106.60 and targeting 113.25-114.50-116.00 and 117.10-118.20.

EUR/USD

EUR/USD on Friday made an intraday low of US$1.0696/EUR, high of US$1.0764/EUR and settled the day up by 0.297% to close at US$1.0734/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 1.0740-1.0970, targeting 1.0690-1.0630-1.0550 and 1.0490-1.0450-1.0390 with stop-loss at daily closing above 1.1100. Buy above 1.0690-1.0210 with risk below 1.0210, targeting 1.0741-1.0795 and 1.0920-1.0970-1.1005.

GBP/USD

GBP/USD on Friday made an intra‐day low of US$1.2568/GBP, high of US$1.2662/GBP and settled the day up by 0.371% to close at US$1.2632/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 1.2575-1.2010 with target 1.2650-1.2745 and 1.2800-1.2975 with stop loss closing below 1.2010. Sell in between 1.2650-1.2975 with targets at 1.2575-1.2490-1.2420 and 1.2310-1.2200-1.2150 with stop loss should be 1.2975.

USD/JPY

USD/JPY on Friday made intra‐day low of JPY126.67/USD and made an intraday high of JPY127.24/USD and settled the day down 0.003% at JPY127.11/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 127.50-132.50 with risk above 132.50 targeting 127.50-126.90-126.10 and 125.00-124.30. Long positions above 126.90-124.30 with targets of 127.50-128.90-129.60 and 130.60-131.20-132.00 with stop below 124.30.