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Daily Market Lookup

  • The dollar traded marginally higher in early European trade Friday, with traders cautious ahead of the release of U.S. jobs data that could shed some light on the strength of the country’s economic recovery. The dollar has managed to halt its recent slide, but the overall sentiment remains one of weakness given the Federal Reserve has strongly implied that it intends to keep rates low for a very long time. On top of this, there remain concerns about the strength of U.S. economic growth One gauge of the strength of the U.S. recovery will be the employment market, and data due later Friday is expected to show U.S. non-farm payrolls grew by 1.4 million in August, which would be slower than the 1.763 million jobs created in the previous month. Employment would still be about 11.5 million below its pre-pandemic level, and the slowing growth could add pressure on U.S. policymakers to restart stalled negotiations for another fiscal package. German industrial goods orders rose by a smaller-than-expected 2.8% on the month in July, although an upward revision to the June numbers left the actual level not far off consensus forecasts, according to Pantheon Macroeconomics analyst Claus Vistesen. GBP/USD dropped 0.1% to 1.3272, retreating from its highest level in almost a year due to a lack of progress in trade negotiations between Britain and the European Union. Senior U.K. officials see only a 30%-40% chance that there will be a Brexit trade agreement with the European Union due to an impasse over state aid rules and fisheries rights, The Times reported Friday. The dollar was steady on Friday morning in Asia ahead of the release of U.S. jobs data that could shed some light on the quality of the economic recovery. The dollar has gained some ground against other main currencies like the euro in recent days but “my main scenario is for the dollar to fall, for stocks to rise and for yields to fall because the Fed is expected to stick with low interest rates,” Junichi Ishikawa, senior foreign exchange strategist at IG Securities in Japan, told Reuters. Data on non-farm payrolls out on Friday in the U.S. could shed some light on the strength of the economic recovery there. On Thursday, the U.S. Department of Labor reported initial jobless claims fell to 881,000 for the week to Aug. 28, lower than forecasts of 950,000. On Wednesday, Chief Cabinet Secretary Yoshihide Suga declared his candidacy to lead the Liberal Democratic Party and succeed outgoing Prime Minister Shinzo Abe. The Chinese currency is up about 5% against the greenback since May. The People’s Bank of China (PBOC) set the daily reference rate for the yuan at 6.8359 compared to 6.8319 on Thursday. On Thursday, both Japan and China released purchasing managers' index (PMI) figures for August with slight dips. Japan’s August services PMI came in at 45, slightly below July’s 45.4. China’s Caixin services PMI for August was 54 against July’s 54.1.
  • The dollar steadied against major currencies on Friday as traders awaited key U.S. jobs data that may cast doubt on the strength of economic recovery from the coronavirus outbreak. The greenback has managed to halt its recent slide, but analysts warn sentiment remains weak due to concern about the strength of U.S. economic growth and speculation that the Federal Reserve will keep rates low for a very long time. The British pound bought $1.3285, retreating from its highest level in almost a year due to a lack of progress in trade negotiations between Britain and the European Union. Data due later on Friday is expected to show U.S. non-farm payrolls grew by 1.4 million in August, which would be slower than the 1.763 million jobs created in the previous month. There are growing signs the labour market recovery from the depths of the pandemic is faltering, with financial support from the government virtually depleted. The U.S. central bank last week overhauled its policy framework to focus more on addressing shortfalls in employment and less on inflation, which would allow it to keep rates lower for longer periods, which is a negative for the dollar. Chicago Fed President Charles Evans said on Thursday the bank could promise to keep interest rates pinned near zero until inflation reaches 2.5%, well above current low levels and modestly above the inflation target of 2%.
  • Oil was down on Friday morning in Asia after reports that production in the Gulf of Mexico is moving closer to restarting following the halt caused by Hurricane Laura. On Thursday, the U.S. Bureau of Safety and Environmental Enforcement (BSEE) reported that all dynamically positioned rigs have returned to their working locations in the Gulf of Mexico but production has not yet restarted in 16% of rigs. On Wednesday, the U.S. Energy Information Administration (EIA) reported that crude inventories fell by 9.4 million barrels for the week to Aug. 28, much larger than the expect fall of 1.2 million barrels. Also on Thursday, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated six entities as providers of logistical support for the sale of Iranian crude to international markets. Washington also targeted five companies and three individuals sanctioned for allegedly “engaging in a significant transaction for the purchase, acquisition, sale, transport, or marketing of petroleum or petroleum products from Iran.” Also putting a cap on prices, data from Refinitiv Eikon forecast that oil imports by China could fall in September after a large boost in inventories over the past five months.

 

 
Intraday RESISTANCE LEVELS
4th September 2020 R1 R2 R3
GOLD-XAU 1,940-1,954 1,971 1,989-2,010
Silver-XAG 27.00-28.10 29.00 29.80-30.50
Crude Oil 42.00-43.15 44.10 45.00-46.30
EURO/USD 1.1850-1.1900 1.1955 1.2000-1.2050
GBP/USD 1.3290-1.3350 1.3420 1.3490-1.3520
USD/JPY 106.90 107.30 108.10-108.90

Intraday SUPPORTS LEVELS
4th September 2020 S1 S2 S3
GOLD-XAU 1,924-1,915 1,900 1,889-1,880
Silver-XAG 26.10-26.55 25.10 24.50-23.70
Crude Oil 41.00 40.60-39.50 38.70
EURO/USD 1.1800-1.1730 1.1690 1.1635-1.1600
GBP/USD 1.3250-1.3180 1.3100 1.3050-1.3000
USD/JPY 106.10-105.50 104.90 104.30-103.90

Intra-Day Strategy (4th September 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 Thursday made its intraday high of US$1951.01/oz and low of US$1921.76/oz. Gold down 0.614% at US$1930.14/oz.

Technicals in Focus:

In daily charts, prices are above 50DMA (1882) and breakage below will call for 1805. 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 overbought territory and giving positive crossover to bullish 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 and 1924-1900-1889.

 
Intraday Support Levels
S1     1,924-1,915
S2     1,900
S3     1,889-1,880
Intraday Resistance Levels
R1     1,940-1,954
R2     1,971
R3     1,989-2,010

Technical Indicators

Name   Value Action
14DRSI  

58.043

Buy
20-DMA   1966.45 Buy
50-DMA  

1882.25

Buy
100-DMA   1805.63 Buy
200-DMA   1682.51 Buy
STOCH(5,3)   88.503 Buy
MACD(12,26,9)   15.45 Sell

Silver - XAG

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Silver on Thursday made its intraday high of US$27.69/oz and low of US$26.46/oz settled down by 6.73% at US$26.57/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 28.10-24.50 targeting 29.00-29.80 and 30.50-31.00, stop breakage below 22.50. Sell below 29.00-30.00 with stop loss above 30.00; targeting 28.10-27.20-26.10 and 25.00-24.30.

 
Intraday  Support Levels
S1     26.10-26.55
S2     25.10
S3     24.50-23.70

Intraday  Resistance Levels
R1     27.00-28.10
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 Thursday made an intra‐day high of US43.53/bbl, intraday low of US$40.42/bbl and settled down by 0.843% to close at US$41.38/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 41.15-38.50 with risk daily closing below 36.65 and targeting 42.00-43.15-44.10 and 45.00-46.30-47.00. Sell in between 42.10-47.30 with stop loss at 47.30; targeting 42.00-43.15-42.00-41.00 and 40.60-39.50-38.50.

 
Intraday Support Levels
S1     41.00
S2     40.60-39.50
S3     38.70

Intraday Resistance Levels
R1     42.00-43.15
R2     44.10
R3     45.00-46.30

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 Thursday an intraday low of US$1.1900/EUR, high of US$1.1863/EUR and settled the day down by 0.843% to close at US$1.1850/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 1.1800-1.1600 with risk below 1.1600, targeting 1.1850-1.1900-1.1955 and 1.2050-1.2100-1.2170. Sell below 1.1850-1.2250 targeting 1.1800-1.1730-1.1690 and 1.1635-1.1600 with stop-loss at daily closing above 1.2250.

 
Intraday Support Levels
S1     1.1800-1.1730
S2     1.1690
S3     1.1635-1.1600

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

TECHNICAL INDICATORS
Name   Value Action
14DRSI   53.032 Buy
20-DMA   1.1834 Buy
50-DMA   1.1631 Buy
100-DMA   1.1329 Buy
200-DMA   1.1178 Buy
STOCH(5,3)   38.758 Sell
MACD(12,26,9)   -0.0011 Buy

GBP/USD

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GBP/USD on Thursday made an intra‐day low of US$1.3241/GBP, high of US$1.3401/GBP and settled the day down by 0.526% to close at US$1.3279/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 1.3290-1.3550 with targets at1.3250-1.3190 and 1.3100-1.3050 stop-loss should be 1.3550. Buy above 1.3250-1.3050 with targets 1.3290-1.3350-1.3420 and 1.3490-1.3520 with stop loss closing below 1.3000.

 
Intraday Support Levels
S1     1.3250-1.3180
S2     1.3100
S3     1.3050-1.3000

Intraday Resistance Levels
R1     1.3290-1.3350
R2     1.3420
R3     1.3490-1.3520

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

59.904

Buy
20-DMA   1.3183 Buy
50-DMA   1.2911 Buy
100-DMA   1.2661 Sell
200-DMA   1.2734 Sell
STOCH(5,3)   36.940 Buy
MACD(12,26,9)   0.0124 Sell

USD/JPY

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USD/JPY on Thursday made intra‐day low of JPY105.99/USD and made an intraday high of JPY106.54/USD and settled the day down by 0.001% at JPY106.17/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 106.50-111.00 with risk above 111.00 targeting 106.10-105.50-104.90 and 104.50-103.90-103.10. Long positions above 106.50-103.00 with targets of 106.90-107.50 and 107.90-108.40-109.40 with stop below 105.00.

 
Intraday Support Levels
S1     106.10-105.50
S2     104.90
S3     104.30-103.90

INTRADAY RESISTANCE LEVELS
R1     106.90
R2     107.30
R3     108.10-108.90

TECHNICAL INDICATORS
Name   Value Action
14DRSI   50.904 Buy
20-DMA   106.08 Sell
50-DMA   106.46 Sell
100-DMA   106.92 Sell
200-DMA   107.92 Sell
STOCH(9,6)   46.253 Sell
MACD(12,26,9)   -0.099 Sell

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