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Daily Market Lookup

  • The dollar was set for a fourth straight month of losses on Monday after a U.S. Federal Reserve policy shift on inflation, while the euro was poised to post a fourth month of gains, taking both currencies to levels last seen in 2018. Investors are adjusting to a speech last Thursday in which Federal Reserve Chair Jerome Powell outlined an accommodative policy change which is believed could result in inflation moving slightly higher and interest rates staying lower for longer. If sustained that would be its worst August in five years and make for the longest run of monthly losses since the summer of 2017. With most of London's traders off on a banking holiday, attention now turns to a handful of Federal Reserve officials due to speak through the week, beginning with Richard Clarida at 1300 GMT Monday, as they put more flesh on the bank's new policy framework. Eurozone inflation data on Tuesday and U.S. payrolls on Friday will also be closely watched. Elsewhere trade was choppy as the boost to Asian currencies from a solid expansion in China's service sector had begun to fade a bit.
  • The dollar inched down on Monday morning in Asia, giving up some earlier gains, with investors still digesting U.S. Federal Reserve Chairman Jerome Powell’s speech at the Jackson Hole symposium the previous Thursday. Powell's speech unveiled the Fed’s new approach to inflation, which has been interpreted to mean low rates for a longer period Some investors remained bearish, with Societe Generale (OTC:SCGLY) strategists Kit Juckes and Olivier Korber saying in a note, “It seems clear to us that we are at the start of a multi-year period of dollar decline, from very elevated levels... our doubts, about whether the dollar can suffer a broad-based fall in the midst of risk aversion, global recession and particularly emerging market weakness, have been blown aside by the Fed.” Meanwhile, investors will look to speeches from a few other Fed officials, with Vice Chairman Richard Clarida and Atlanta Fed President Raphael Bostic both due to speak later in the day, for more clues on the Fed’s new approach to inflation. The yen saw gains after Sunday’s reports that Yoshihide Suga, Abe’s Chief Cabinet Secretary, intended to run for prime minister, after incumbent Shinzo Abe announced on Friday that he would be stepping down from the position due to poor health. If elected, Suga is widely expected to expand the fiscal and monetary stimulus programs rolled out under Abe. Earlier in the day, China released a manufacturing purchasing managers index (PMI) of 51 and a non-manufacturing PMI of 55.2 for August. Although the manufacturing PMI was slightly lower than the forecasted 51.2 prepared by Investing.com, the figures stayed above the 50-mark indicating expansion.
  • Oil was up on Monday morning in Asia, with global stimulus measures continuing to support prices but with gains capped over creeping fears of an oversupply. Hurricane Laura, which struck the Gulf of Mexico region during the previous week, had a weaker impact on oil markets than feared, with the region’s offshore platforms and refineries that were shut down during the storm continuing to restore operations. A weak dollar was also supporting oil, but sluggish fuel demand recovery as the number of COVID-19 cases continues to rise and fears of an oversupply dampened investor sentiment. Some investors warned of hurdles ahead for the black liquid. Tran's warning was supported by data from Refinitiv and Vortexa forecasting that Chinese crude oil imports in September will fall for the first time in five months. Oil rose on Monday, with Brent touching the highest in five months, underpinned by a 30% cut in Abu Dhabi crude supplies and encouraging Chinese data even as global demand struggles to return to pre-COVID levels in a well supplied market. Abu Dhabi National Oil Company told its customers on Monday that it will reduce October supplies by 30%, up from a 5% cut in September, as directed by the United Arab Emirates government to meet its commitment on the recent OPEC+ agreement. Energy companies continued efforts to restore operations at U.S. Gulf Coast offshore platforms and refineries shut before the storm. A weak U.S. dollar and a survey on Monday showing surprisingly strength in China's services sector supported oil prices even though fuel demand has struggled to recover amid the coronavirus pandemic and supplies remain ample, analysts say, cautioning of hurdles for crude going forward. China's crude imports in September are set to fall for the first time in five months as record volumes of crude are stored in and outside of the world's largest importer, data from Refinitiv and Vortexa showed. Reflecting concerns about rising supplies and sluggish global economic recovery, hedge funds and money managers cut bullish wagers on U.S. crude to the lowest level in nearly four months, data showed on Friday. Higher oil and gas prices are also encouraging U.S. producers to resume drilling as the country's oil and gas rig count rose by three to 254 in August, according to data from energy services firm Baker Hughes Co.

 

 
Intraday RESISTANCE LEVELS
31st August 2020 R1 R2 R3
GOLD-XAU 1,971-1,989 2,010 2,023-2,03 0
Silver-XAG 28.10 29.00 29.80-30.50
Crude Oil 44.10 45.00-46.30 47.00
EURO/USD 1.1850-1.1900 1.1955 1.2000-1.2050
GBP/USD 1.3350-1.3420 1.3490 1.3520-1.3550
USD/JPY 106.10-106.90 107.30 108.10-108.90

Intraday SUPPORTS LEVELS
31st August 2020 S1 S2 S3
GOLD-XAU 1,954-1,940 1924 1,915-1,901
Silver-XAG 27.00-26.10 26.55 25.10-24.30
Crude Oil 43.15-42.00 41.00 40.60-39.50
EURO/USD 1.1800-1.1730 1.1690 1.1610-1.1550
GBP/USD 1.3290-1.3250 1.3190 1.3100-1.3050
USD/JPY 105.50 104.90 104.30-103.90

Intra-Day Strategy (31st August 2020)
GOLD-XAU Buy on Dips
Silver-XAG Buy on Dips
Crude Oil Neutral to Buy
EUR/USD Neutral to Buy
GBP/USD Neutral to Sell
USD/JPY Neutral to Sell

Gold – XAU

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Gold on Friday made its intraday high of US$1973.75/oz and low of US$1922.96/oz. Gold up 1.807% at US$1963.32/oz.

Technicals in Focus:

In daily charts, prices are above 50DMA (1642) and breakage below will call for 1600. MACD is above zero line and histograms are also increasing trend and it will bring upward stance in the upcoming sessions. RSI is in neutral region and more upside is expected before it gets stretched. Stochastic Oscillator is in oversold territory and giving negative crossover to bearish stance for intraday trade.

Trading Strategy: Buy on Dips

Based on the charts and explanations above; buy above 1954-1900 with risk below 1900, targeting 1971-1989-2010 and 2023-2030. Sell below 1971-2030 keeping stop loss closing above 2030, targeting 1954-1940-1924 and 1900-1889-1881.

 
Intraday Support Levels
S1     1,954-1,940
S2     1924
S3     1,915-1,901
Intraday Resistance Levels
R1     1,971-1,989
R2     2,010
R3     2,023-2,03 0

Technical Indicators

Name   Value Action
14DRSI  

51.043

Buy
20-DMA   1967.45 Buy
50-DMA  

1883.25

Buy
100-DMA   1799.63 Buy
200-DMA   1677.51 Buy
STOCH(5,3)   54.503 Buy
MACD(12,26,9)   12.45 Sell

Silver - XAG

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Silver on Friday made its intraday high of US$27.69/oz and low of US$26.81/oz settled up by 1.882% at US$27.48/oz.

Technicals in Focus:

On daily charts, silver is sustaining above 20DMA (21.60), breakage below will lead to 19.40. MACD is above zero line and histograms are increasing trend and it will bring bullish stance in the upcoming sessions. RSI is approaching overbought region, indicating buy signal for now. The Stochastic Oscillator is in neutral region and giving positive crossover to show upside move for the intraday trade.

Trading Strategy: Buy on Dips

Based on the charts and explanations above, buy above 27.10-24.50 targeting 28.20-29.00 and 29.80-30.50, stop breakage below 22.50. Sell below 28.00-30.00 with stop loss above 30.00; targeting 27.20-26.10-25.00 and 24.30-23.35.

 
Intraday  Support Levels
S1     27.00-26.10
S2     26.55
S3     25.10-24.30

Intraday  Resistance Levels
R1     28.10
R2     29.00
R3     29.80-30.50

TECHNICAL INDICATORS
Name   Value Action
14DRSI   60.514 Buy
20-DMA   24.90 Buy
50-DMA   20.81 Buy
100-DMA   18.30 Buy
200-DMA   17.66 Buy
STOCH(5,3)   49.268 Buy
MACD(12,26,9)   1.914 Buy

Oil - WTI

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Crude Oil on Friday made an intra‐day high of US43.49/bbl, intraday low of US$42.80/bbl and settled down by 0.0534% to close at US$43.04/bbl.

Technicals in Focus:

On daily charts, oil is sustaining below its 50DMA i.e. 40.00 which is a resistance level and breakage above will call for 44.00. MACD is below zero line and histograms are in increasing mode will bring bullish stance in the upcoming sessions. The Stochastic Oscillator is in overbought region and giving positive crossover for confirmation of bullish stance; while the RSI is in neutral region and more downside can be expected to reach the oversold region, which is highly probable.

Trading Strategy: Neutral to Buy

Based on the charts and explanations above; buy above 43.15-38.50 with risk daily closing below 36.65 and targeting 44.10-45.00 and 46.30-47.00. Sell in between 44.10-47.30 with stop loss at 47.30; targeting 43.15-42.00-41.00 and 40.60-39.50-38.50.

 
Intraday Support Levels
S1     43.15-42.00
S2     41.00
S3     40.60-39.50

Intraday Resistance Levels
R1     44.10
R2     45.00-46.30
R3     47.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   63.099 Sell
20-DMA   42.14 Buy
50-DMA   41.02 Buy
100-DMA   34.96 Buy
200-DMA   42.11 Sell
STOCH(5,3)   78.130 Buy
MACD(12,26,9)   0.738 Sell

EUR/USD

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EUR/USD on Friday an intraday low of US$1.1810/EUR, high of US$1.1919/EUR and settled the day up by 0.6987% to close at US$1.1903/EUR.

Technicals in Focus:

On daily charts, prices are sustaining below 100DMA (1.1031), which become immediate resistance level, break above will target 1.1090. MACD is below zero line but histograms are increasing mode which will bring bullish view. Stochastic is in oversold territory and giving negative crossovers to signal for bearish outlook for intraday. 14D RSI is currently in neutral region and giving no directions to consider right now.

Trading Strategy: Neutral to Buy

Buy above 1.1800-1.1540 with risk below 1.1540, targeting 1.1850-1.1900-1.1950 and 1.2000-1.2100. Sell below 1.1850-1.2050 targeting 1.1800-1.1730-1.1650 and 1.1610-1.1500 with stop-loss at daily closing above 1.1950.

 
Intraday Support Levels
S1     1.1800-1.1730
S2     1.1690
S3     1.1610-1.1550

Intraday  Resistance Levels
R1     1.1850-1.1900
R2     1.1955
R3     1.2000-1.2050

TECHNICAL INDICATORS
Name   Value Action
14DRSI   57.032 Buy
20-DMA   1.1811 Buy
50-DMA   1.1531 Buy
100-DMA   1.1253 Buy
200-DMA   1.1145 Buy
STOCH(5,3)   28.758 Sell
MACD(12,26,9)   -0.0011 Buy

GBP/USD

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GBP/USD on Friday made an intra‐day low of US$1.3185/GBP, high of US$1.3355/GBP and settled the day up by 1.156% to close at US$1.3351/GBP.

Technicals in Focus:

On daily charts, prices are sustaining above 20DMA (1.3134) 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 oversold territory and giving negative crossover to confirm bearish stance. MACD is above zero line but histograms are increasing lead to upward movement.

Trading Strategy: Neutral to Sell

Based on the charts and explanations above; sell below 1.3350-1.3550 with targets at 1.3290-1.3250-1.3190 and 1.3100-1.3050-1.3015 stop-loss should be 1.3550. Buy above 1.3290-1.3050 with targets 1.3350-1.3420-1.3490 and 1.3520-1.3550 with stop loss closing below 1.3000.

 
Intraday Support Levels
S1     1.3290-1.3250
S2     1.3190
S3     1.3100-1.3050

Intraday Resistance Levels
R1     1.3350-1.3420
R2     1.3490
R3     1.3520-1.3550

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

64.904

Buy
20-DMA   1.3134 Buy
50-DMA   1.2838 Buy
100-DMA   1.2629 Sell
200-DMA   1.2725 Sell
STOCH(5,3)   82.940 Buy
MACD(12,26,9)   0.0305 Sell

USD/JPY

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USD/JPY on Friday made intra‐day low of JPY105.19/USD and made an intraday high of JPY106.94/USD and settled the day down by 1.136% at JPY105.34/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 106.00-111.00 with risk above 111.00 targeting 105.50-104.90 and 104.50-103.90-103.10. Long positions above 106.10-103.00 with targets of 106.00-106.50-106.90 and 107.90-108.40-109.40 with stop below 105.00.

 
Intraday Support Levels
S1     105.50
S2     104.90
S3     104.30-103.90

INTRADAY RESISTANCE LEVELS
R1     106.10-106.90
R2     107.30
R3     108.10-108.90

TECHNICAL INDICATORS
Name   Value Action
14DRSI   47.904 Buy
20-DMA   106.03 Sell
50-DMA   106.49 Sell
100-DMA   106.49 Sell
200-DMA   107.99 Sell
STOCH(9,6)   80.253 Sell
MACD(12,26,9)   -0.1448 Sell

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