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Daily Market Lookup

  • Asian share prices dropped on Friday following mixed U.S. earnings reports and after the European Central Bank disappointed those investors who had expected an immediate easing while the euro held above two-year lows struck overnight. But several companies that announced results after the market had closed on Thursday generally beat expectations, and their shares rose in after-hours trade. Uncertainties over whether Washington and Beijing will be able to settle gaping differences over trade, technology and even geopolitical ambitions, kept many investors on guard. Negotiators from the two sides will meet in Shanghai next week. A rally in global bonds ran out of steam after European Central Bank President Mario Draghi cautioned about pulling the trigger too quickly on policy easing, even though he all but pledged to loosen monetary settings further as the growth outlook deteriorates. Many market players had thought Draghi could cut rates on Thursday. ECB officials told Reuters after the meeting that an interest rate cut in September appeared certain, while government bond purchases and a revamped policy message were also likely. While European bond yields are likely to stay under pressure until the next ECB meeting on Sept 12, Brexit could become a central issue as investors look to the stance of Britain’s new government under Boris Johnson. Also helping to stem falls in bond yields, new orders for key U.S.-made capital goods surged in June, suggesting some improvement in business investment. Despite that, investors expect the Federal Reserve to cut interest rates by 0.25 percentage point at its policy meeting ending on July 31 to protect the economy from potential damage from the protracted U.S.-China trade war. An advance reading of U.S. GDP, due at 8:30 a.m (1230 GMT), is expected to show the economy grew 1.8% in April-June, which would be the slowest growth in more than two years.
  • The euro and the pound were little changed against the U.S. dollar on Friday in Asia following mixed comments from ECB President Mario Draghi. The euro initially rallied after Draghi signalled that the ECB would ease in September to battle the euro zone’s economic slowdown as the outlook gets “worse and worse,” he said. The ECB kept rates unchanged on Thursday, just after manufacturing data in the euro area showed that the economy is contracting, while business confidence in Germany fell. Draghi indicated the bank was prepared to cut rates in September and consider other options for easing. However, he also said the risk of a recession in the region was low Some traders interpreted his message as meaning that the central bank would not be as aggressive in its easing measures and that the U.S. Federal Reserve could follow suit when it meets next week Traders will then shift their focus to the Federal Reserve and Bank of Japan meetings next week. The euro held gains after ECB kept policy unchanged, disappointing some market participants who had bet on a possible easing. ECB President Mario Draghi also sounded more upbeat on the euro-zone economy than some investors expected, curbing speculation the bank was about to enter a prolonged easing cycle. In addition to Draghi's comments, a bounce in Treasury yields and data on Thursday showing a surge in U.S. capital goods orders provided more reasons for traders to reconsider expectations for global monetary easing. With no major events scheduled in Asia, investors are likely to look to U.S. economic data later in the day. The focus then shifts to Federal Reserve and BOJ meetings next week. The Fed is widely expected to cut rates, but there are growing views such a move may be a one-off event, not the start of a major easing cycle. The BOJ is also divided over whether to ease policy, but expectations for a move are low.
  • The U.S. dollar index that tracks the greenback against a basket of other currencies was little changed at 97.512 ahead of the second-quarter GDP data due later in the day. Data due later on Friday is expected to show U.S. economic growth slowed to 1.8% in the second quarter from 3.1% in the previous quarter, but investors will focus on consumer spending to gauge the underlying strength of the economy. The Fed is widely expected to lower its target range of 2.25%-2.50% by 25 basis points at a meeting ending July 31, but expectations for a larger 50-basis point have waned due to positive economic data. Before the Fed meets, the BOJ announces its policy decision on July 30. Central bank officials are divided on whether to ease policy, but some argue there is no immediate need for action as domestic demand offsets weak exports. Sterling changed hands at $1.2455, on course for a 0.5% weekly loss. Cable has stabilized since Boris Johnson became Britain's new prime minister, but there is still uncertainty about Britain's negotiations to leave the European Union.
  • Oil prices continued to gain on Friday in Asia on fall in U.S. crude stockpiles. Without any other significant directional drivers, analysts said the gains today were led by bullish supply-side fundamentals, including data from a day earlier showing a draw in U.S. stockpiles for the sixth-consecutive week. U.S. crude stocks fell by 10.8 million barrels last week, the Energy Information Administration reported on Wednesday, well above Investing.com's consensus expectations for a draw of 4 million barrels. However, some analysts believe the weekly data was partially distorted by Hurricane Barry, which came ashore on the central Louisiana coast earlier this month and forced many oil platforms to shut down their production. Concerns over Middle Easy supply disruptions also continued to be cited as supporting the oil markets, although a slowing global economic growth kept gains limited. On the Sino-U.S. trade front, officials from both sides are set to resume in-person trade talks as soon as next week, according to reports.

 

 
Intraday RESISTANCE LEVELS
26th July 2019 R1 R2 R3
GOLD-XAU 1,424-1,429 1,436 1,450-1,457
Silver-XAG 16.60-16.90 17.50 17.90
Crude Oil 56.50-57.50 58.10 59.20-60.50
EURO/USD 1.1150-1.1180 1.1210 1.1240-1.1280
GBP/USD 1.2500-1.2550 1.2600 1.2650-1.2700
USD/JPY 109.05 109.50-110.15 111.00

Intraday SUPPORTS LEVELS
26th July 2019 S1 S2 S3
GOLD-XAU 1,413-1,405 1,390 1,380
Silver-XAG 16.20-15.90 15.50 15.25-15.05
Crude Oil 56.05 55.50 54.90-54.00
EURO/USD 1.1130-1.1106 1.0950 1.0905
GBP/USD 1.2410 1.2350 1.2300-1.2250
USD/JPY 108.40-108.00 107.60 107.00-106.50

Intra-Day Strategy (26th July 2019)
GOLD-XAU Buy on Dips
Silver-XAG Buy on Dips
Crude Oil Neutral
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$1433.62/oz and low of US$1410.94/oz. Gold down by 0.809% at US$1414.02/oz.

Technicals in Focus:

In daily charts, prices are above 100DMA (1303) and breakage below will call for 1296-1288. MACD is above zero line and histograms are decreasing trend and it will bring downward stance in the upcoming sessions. RSI is in overbought region and more upside is expected before it gets stretched. Stochastic Oscillator is in oversold territory and giving negative crossover to confirm bearish stance for intraday trade.

Trading Strategy: Buy on Dips

Based on the charts and explanations above; buy above 1413-1382 with risk below 1390, targeting 1429-1436-1450 and 1457-1464. Sell below 1424-1464 keeping stop loss closing above 1470, targeting 1424 and 1409-1400-1390.

 
Intraday Support Levels
S1     1,413-1,405
S2     1,390
S3     1,380
Intraday Resistance Levels
R1     1,424-1,429
R2     1,436
R3     1,450-1,457

Technical Indicators

Name   Value Action
14DRSI  

55.388

Buy
20-DMA   1413.96 Buy
50-DMA  

1366.84

Buy
100-DMA   1329.20 Buy
200-DMA   1297.71 Buy
STOCH(5,3)   18.899 Sell
MACD(12,26,9)   13.175 Buy

Silver - XAG

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Silver on Thursday made its intraday high of US$16.63/oz and low of US$16.30/oz. Silver settled down by 0.996% at US$16.39/oz.

Technicals in Focus:

On daily charts, silver is sustaining below 200DMA (15.00), breakage above will lead to 15.60. MACD is above zero line and histograms are increasing trend and it will bring bullish stance in the upcoming sessions. RSI is in oversold region, indicating buy signal for now. The Stochastic Oscillator is in oversold region and giving negative crossover to show downside move for the intraday trade.

Trading Strategy: Buy on Dips

Based on the charts and explanations above, buy above 16.20-14.50 targeting 16.50-16.90 and 17.50-17.90; stop breakage below 14.50. Sell below 16.50-17.90 with stop loss above 17.90; targeting 16.20-15.90-15.50 and 15.05-14.60.

 
Intraday  Support Levels
S1     16.20-15.90
S2     15.50
S3     15.25-15.05

Intraday  Resistance Levels
R1     16.60-16.90
R2     17.50
R3     17.90

TECHNICAL INDICATORS
Name   Value Action
14DRSI   73.196 Buy
20-DMA   15.60 Sell
50-DMA   15.12 Buy
100-DMA   15.09 Buy
200-DMA   15.06 Buy
STOCH(5,3)   83.246 Buy
MACD(12,26,9)   0.372 Buy

Oil - WTI

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Crude Oil on Thursday made an intra‐day high of US$57.00/bbl, intraday low of US$55.33/bbl and settled down by 0.026% to close at US$55.89/bbl.

Technicals in Focus:

On daily charts, oil is sustaining above its 100DMA i.e. 55.88 which is a resistance level and breakage above will call for 59.60. MACD is above zero line and histograms are in decreasing mode will bring bearish stance in the upcoming sessions. The Stochastic Oscillator is in oversold region and giving negative crossover for confirmation of bearish stance; while the RSI is in oversold region and more downside can be expected.

Trading Strategy: Neutral

Based on the charts and explanations above; sell below 56.50-60.50 with stop loss at 60.50; targeting 56.05-55.50 and 54.50-54.00. Buy above 56.05-54.00 with risk daily closing below 54.00 and targeting 56.50-57.50-58.10 and 59.20-60.50.

 
Intraday Support Levels
S1     56.05
S2     55.50
S3     54.90-54.00

Intraday Resistance Levels
R1     56.50-57.50
R2     58.10
R3     59.20-60.50

TECHNICAL INDICATORS
Name   Value Action
14DRSI   44.821 Sell
20-DMA   57.65 Sell
50-DMA   56.91 Sell
100-DMA   59.30 Sell
200-DMA   57.20 Sell
STOCH(5,3)   47.130 Buy
MACD(12,26,9)   -0.267 Sell

EUR/USD

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EUR/USD on Thursday made an intraday low of US$1.1100/EUR, high of US$1.1187/EUR and settled the day up by 0.053% to close at US$1.1145/EUR.

Technicals in Focus:

On daily charts, prices are sustaining below 200DMA (1.1349), which become immediate resistance level, break above will target 1.1320-1.1280. MACD is below zero line but histograms are increasing mode which will bring bullish view. Stochastic is in oversold 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.

Trading Strategy: Neutral to Buy

Buy above 1.1130-1.0905 with risk below 1.0905, targeting 1.1150-1.1210-1.1240 and 1.1280-1.1320. Sell below 1.1150-1.1280 targeting 1.1130-1.1105 and 1.0950-1.0905 with stop-loss at daily closing above 1.1105.

 
Intraday Support Levels
S1     1.1130-1.1106
S2     1.0950
S3     1.0905

Intraday  Resistance Levels
R1     1.1150-1.1180
R2     1.1210
R3     1.1240-1.1280

TECHNICAL INDICATORS
Name   Value Action
14DRSI   35.376 Buy
20-DMA   1.1236 Sell
50-DMA   1.1241 Sell
100-DMA   1.1243 Sell
200-DMA   1.1309 Sell
STOCH(5,3)   5.958 Buy
MACD(12,26,9)   -0.002 Buy

GBP/USD

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GBP/USD on Thursday made an intra‐day low of US$1.2436/GBP, high of US$1.2517/GBP and settled the day down by 0.2435% to close at US$1.2452/GBP.

Technicals in Focus:

On daily charts, prices are sustaining above 200DMA (1.2960) is become major 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 positive crossover to confirm bearish stance. MACD is above zero line but histograms are increasing lead to downward movement.

Trading Strategy: Neutral to Sell

Based on the charts and explanations above; sell below 1.2500-1.2790 with targets at 1.2450-1.2350 and 1.2300-1.2250 top should be below 1.2790. Buy above 1.2500-1.2250 with targets 1.2600 and 1.2650-1.2700-1.2750 with stop loss closing below 1.2250.

 
Intraday Support Levels
S1     1.2410
S2     1.2350
S3     1.2300-1.2250

Intraday Resistance Levels
R1     1.2500-1.2550
R2     1.2600
R3     1.2650-1.2700

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

33.392

Buy
20-DMA   1.2507 Sell
50-DMA   1.2605 Sell
100-DMA   1.2832 Sell
200-DMA   1.2858 Sell
STOCH(5,3)   33.175 Sell
MACD(12,26,9)   -0.0061 Sell

USD/JPY

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USD/JPY on Thursday made intra‐day low of JPY108.03/USD and made an intraday high of JPY108.74/USD and settled the day up by 0.416% at JPY108.62/USD.

Technicals in Focus:

In daily charts, JPY is sustaining above 100DMA (110.64), 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 oversold territory and signaling to sell as it has given negative crossover to confirm bearish stance.

Trading Strategy: Neutral to Sell

Sell below 109.00-111.00 with risk above 111.00 targeting 108.40-108.00-107.60 and 107.00-106.50. Long positions above 108.40-106.00 with targets of 109.05-109.50 and 110.00-111.00 with stop below 106.00.

 
Intraday Support Levels
S1     108.40-108.00
S2     107.60
S3     107.00-106.50

INTRADAY RESISTANCE LEVELS
R1     109.05
R2     109.50-110.15
R3     111.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   55.936 Buy
20-DMA   108.16 Sell
50-DMA   108.40 Sell
100-DMA   109.74 Buy
200-DMA   110.56 Sell
STOCH(9,6)   90.58 Buy
MACD(12,26,9)   -0.022 Buy

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