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Daily Market Lookup

  • The dollar traded higher in early European trade Monday, while the euro was weakened by disappointing German industrial production data and sterling was weighed on by the revived risk of a messy end to the Brexit transition period at the end of the year. Data from the U.S. Labor Department released on Friday showed that August’s jobless rate fell to 8.4% from 10.2%, despite government funding drying up and rising doubts about the sustainability of the U.S. economic recovery. EUR/USD dropped 0.1% to 1.1829, weighed by disappointing German industrial output data for July. This rose 1.2%, increasing for the third straight month, but growing by less than forecast by economists. The region’s uncertain outlook is set to feature prominently in discussions when European Central Bank officials meet this week. Most economists predict the Governing Council will keep policy unchanged on Thursday, although they expect another increase in asset purchases before the end of the year. “What will count most next week is the question of whether the stronger euro has already opened the door for more monetary stimulus in the coming months. The Financial Times reported Monday that the U.K. government is planning new legislation that will override key parts of the Brexit Withdrawal Agreement. This would make clinching a new trade deal before the end of a status-quo transition arrangement in December very difficult. Without a deal nearly $1 trillion in trade between Britain and the EU could be thrown into uncertainty. The dollar was up on Monday morning in Asia, but gains were capped by trade that was thinned due to the Labor Day holiday in the U.S., as well as Friday’s data showing a slowdown in job growth in August. Data from the U.S. Labor Department released on Friday showed that U.S. employment growth slowed, and permanent job losses increased, with government funding drying up and rising doubts about the sustainability of the U.S. economic recovery. But the data also showed that August’s jobless rate fell to 8.4% from 10.2%. Investors are now focusing on the European Central Bank’s inflation forecasts before it hands down its policy decision on Thursday, but the policy itself is widely expected to remain unchanged. The Brexit impasse continues, with Britain’s insistence over full autonomy over its state aid plans increasing the risk of a deal being finalized before the cut-off date of December 31.
  • The dollar steadied in holiday-thinned trade on Monday after U.S. jobs data showed job growth slowed further in August, while traders shifted their focus to the European Central Bank's meeting on Thursday. Broader sentiment on the dollar remains weak after Federal Reserve Chair Jerome Powell reiterated on Friday that the central bank plans to keep U.S. rates lower for longer. Analysts said a sharp decline in U.S. stocks last week also prompted some traders to adjust their positions on the dollar. The focus this week will be on European Central Bank's policy decision on Thursday. Most analysts don't expect a change in policy stance but are focusing on the message the ECB will deliver on its inflation forecasts. The ECB meeting comes after the euro marked a two-year high at the beginning of the month. The common currency, however, quickly retraced after executive board member Philip Lane said last week that the appreciation of the euro "does matter" for monetary policy, highlighting the potential for further easing from the bank. Amid an EU-UK trade negotiations impasse, the chances of a no-deal Brexit have risen sharply as negotiations have been threatened by Britain's insistence that it have full autonomy over its state aid plans. UK Prime Minister Boris Johnson's office released comments on Monday that Britain has set a deadline of Oct. 15, and if none of the free-trade deal is agreed, both sides should "accept that and move on." On the data front, the United States has producer prices on Wednesday and consumer price data on Friday, while China's consumer prices will be released on Wednesday.
  • Oil prices were trading down more than 1% on Monday after hitting their lowest since July, as Saudi Arabia made the deepest monthly price cuts for supply to Asia in five months and optimism about demand recovery cooled amid the pandemic. The world remains awash with crude and fuel despite supply cuts by the OPEC and its allies, known as OPEC+, and government efforts to stimulate the global economy and oil demand. Refiners have reduced their fuel output as a result, causing oil producers such as Saudi Arabia to cut prices to offset the falling crude demand The Labor Day holiday on Monday marks the traditional end of the peak summer demand season in the United States and that renewed investors' focus on the current lacklustre fuel demand in the world's biggest oil user. China, the world's biggest oil importer which has been supporting prices with record purchases, slowed its intake in August and increased its products exports, according to customs data on Monday. The world's top oil exporter Saudi Arabia cut the October official selling price for Arab Light crude it sells to Asia by the most since May, indicating demand remains weak. Asia is Saudi Arabia's largest market by region. In August, the OPEC+ group eased production cuts to 7.7 million barrels per day after global oil prices improved from historic lows caused by the coronavirus pandemic cutting fuel demand. Oil is also under pressure as U.S. companies increased their drilling for new supply after the recent recovery in oil prices. U.S. energy firms last week added oil and natural gas rigs for the second time in the past three weeks, according to a weekly report by Baker Hughes Co on Friday.

 

 
Intraday RESISTANCE LEVELS
7th 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 39.50-40.60 41.00 42.00-43.15
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
7th 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 39.00-38.55 37.10 36.40-36.00
EURO/USD 1.1800-1.1730 1.1690 1.1635-1.1600
GBP/USD 1.3210-1.3180 1.3100 1.3050-1.3000
USD/JPY 106.10-105.50 104.90 104.30-103.90

Intra-Day Strategy (7th 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 Friday made its intraday high of US$1937.78/oz and low of US$1930.92/oz. Gold down 0.180% at US$1934.53/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 Friday made its intraday high of US$27.02/oz and low of US$26.83/oz settled down by 0.193% at US$26.84/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 Friday made an intra‐day high of US39.48/bbl, intraday low of US$40.42/bbl and settled down by 1.824% to close at US$38.75/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     39.00-38.55
S2     37.10
S3     36.40-36.00

Intraday Resistance Levels
R1     39.50-40.60
R2     41.00
R3     42.00-43.15

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$1.1825/EUR, high of US$1.1834/EUR and settled the day down by 0.0845% to close at US$1.1844/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 Friday made an intra‐day low of US$1.3198/GBP, high of US$1.3258/GBP and settled the day down by 0.466% to close at US$1.3218/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     1.3210-1.3180
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 Friday made intra‐day low of JPY106.21/USD and made an intraday high of JPY106.32/USD and settled the day up by 0.065% at JPY106.32/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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