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Daily Market Lookup

  • Asian shares slipped to six-week lows on Thursday while the dollar jumped to two-year highs as the U.S. Federal Reserve rattled markets by signaling that its first rate cut in more than a decade was not the start of a lengthy easing cycle. Investors were pricing in more than 100 basis points of easing from the Fed over the next year, sending world equities soaring to record highs in recent days. But Fed Chair Jerome Powell dented those bets, sounding far more circumspect about the need for further policy easing. World shares recoiled overnight following remarks from Powell that Wednesday’s 25-basis-point easing was “not the beginning of a long series of rate cuts”. Powell characterized the rate cut as “a mid-cycle adjustment to policy”, citing signs of a global slowdown, simmering U.S. trade tensions and a desire to boost too-low inflation. Markets took that as a sign that the Fed will be cautious in making further cuts. Riskier assets such as shares have had a golden run in the past decade as global central banks have kept monetary policies stimulatory, world growth has been strong and corporate profits have surged. But since the middle of last year trade disputes have become a major worry for policymakers as factory activity stuttered, while business investment and profits faltered in a blow to the global economy. Adding to worries, the United States and China on Wednesday ended a brief round of trade talks without much progress in ending their year-long tariff war. Downbeat data and factory surveys on Thursday pointed to further weakness for Asia’s trade-reliant economies. Pressure on Chinese factories eased slightly, but manufacturing activity continued to shrink.
  • The dollar rose to two-year highs on Thursday a day after the Federal Reserve delivered its first rate cut in over a decade amid weaker growth, but indicated that it was not the start of a new easing cycle. Late Wednesday, the U.S. central bank cut rates by 25 basis points, the first such cut since 2008, in order to offset risks to the economy, including global trade tensions. Fed Chairman Jerome Powell said in comments following the widely-anticipated move that it was a “mid-cycle adjustment to policy” rather than “the beginning of a lengthy cutting cycle”. Traders still see one more rate cut this year, but Powell's remarks tempered expectations the Fed is prepared to lower rates well into next year. Elsewhere in currency markets, sterling fell against the dollar toward a two-year low on the growing risk of a no-deal Brexit, but the focus will shift to a Bank of England meeting later on Thursday. The BoE's Monetary Policy Committee is widely expected to vote 9-0 to keep rates on hold at 0.75%. But it is less clear how Governor Mark Carney will tackle the challenge posed by the prospect of Britain leaving the European Union without provisional trading agreements.
  • Oil prices fell on Thursday in Asia despite a bigger-than-expected fall in U.S. crude inventories. The Energy Information Administration reported that crude inventories fell 8.5 million barrels in the week ended July 26, compared to analysts' expectations for a decrease of 2.6 million barrels. The U.S. Federal Reserve cut interest rates on Wednesday as expected, but Fed Chair Jerome Powell said “it’s not the beginning of a long series of rate cuts.” His comments dampened hopes for a string of rate cuts and negatively impacted investor sentiment On the Sino-U.S. trade front, officials from both sides wrapped up the latest round of trade discussions in China on Wednesday without visible signs of progress. Their next meeting will be held in Washington in September, according to a White House statement. Oil prices fell more than $1 on Thursday, declining for the first time in six days, after the U.S. Federal Reserve dampened hopes for a string of rate cuts and Sino-U.S. trade talks ended without progress. The drop came despite a bigger-than-expected decline in inventories in the U.S. and a drop in crude production among OPEC members, along with Libya cutting exports, typically bullish drivers for the market. The Federal Reserve cut interest rates on Wednesday, but against expectations the head of the U.S. central bank said the move might not be the start of a lengthy series of cuts to shore up the economy against risks including global economic weakness. Meanwhile, negotiators from the United States and China, the world's two biggest economies, wrapped up a round of trade talks on Wednesday without visible signs of progress and put off their next meeting until September. Meanwhile, U.S. crude oil stockpiles fell for the seventh straight week, declining to their lowest levels since November even as production rebounded and net imports increased, the Energy Information Administration said on Wednesday. Crude inventories fell 8.5 million barrels in the week ended July 26, far exceeding analysts' expectations for a decrease of 2.6 million barrels. Oil output among members of the Organization of the Petroleum Exporting Countries (OPEC) hit an eight-year low in July as a further voluntary cut by top exporter Saudi Arabia deepened losses caused by U.S. sanctions on Iran and outages elsewhere in the group, a Reuters survey found. Libya's state-owned National Oil Corp declared force majeure on loadings of crude from the country's largest oil field on Wednesday A Reuters monthly poll showed oil prices are expected to be range-bound near current levels this year as slowing economic growth and the protracted trade dispute between the U.S. and China curb demand.

 

 
Intraday RESISTANCE LEVELS
1st August 2019 R1 R2 R3
GOLD-XAU 1,413-1,425 1,429 1,436-1,450
Silver-XAG 16.60-16.90 17.50 17.90
Crude Oil 58.10-59.20 60.50 61.00-61.80
EURO/USD 1.1090-1.1130 1.1150 1.1180-1.1210
GBP/USD 1.2190-1.2250 1.2300 1.2350-1.2410
USD/JPY 109.05 109.50-110.15 111.00

Intraday SUPPORTS LEVELS
1st August 2019 S1 S2 S3
GOLD-XAU 1,405 1,390-1,380 1,374
Silver-XAG 15.90 15.50 15.25-15.05
Crude Oil 57.50 56.50 56.07-55.50
EURO/USD 1.1000-1.0905 1.0850 1.0805
GBP/USD 1.2100-1.2065 1.1980 1.1950-1.1900
USD/JPY 108.40-108.00 107.60 107.00-106.50

Intra-Day Strategy (1st August 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 Thursday made its intraday high of US$1434.18/oz and low of US$1410.57/oz. Gold down by 0.521% at US$1412.33/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 1405-1374 with risk below 1374, targeting 1413-1425-1436 and 1450-1457. Sell below 1413-1450 keeping stop loss closing above 1450, targeting 1409-1390-1380 and 1374.

 
Intraday Support Levels
S1     1,405
S2     1,390-1,380
S3     1,374
Intraday Resistance Levels
R1     1,413-1,425
R2     1,429
R3     1,436-1,450

Technical Indicators

Name   Value Action
14DRSI  

50.123

Buy
20-DMA   1416.96 Buy
50-DMA  

1378.23

Buy
100-DMA   1333.97 Buy
200-DMA   1301.63 Buy
STOCH(5,3)   31.021 Sell
MACD(12,26,9)   9.175 Buy

Silver - XAG

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Silver on Wednesday made its intraday high of US$16.55/oz and low of US$16.18/oz. Silver settled down by 1.694% at US$16.24/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 16.00-14.50 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     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   56.508 Buy
20-DMA   15.87 Sell
50-DMA   15.31 Buy
100-DMA   15.14 Buy
200-DMA   15.10 Buy
STOCH(5,3)   62.246 Buy
MACD(12,26,9)   0.377 Buy

Oil - WTI

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Crude Oil on Friday made an intra‐day high of US$58.79/bbl, intraday low of US$57.79/bbl and settled down by 0.754% to close at US$57.89/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 58.10-61.80 with stop loss at 61.80; targeting 57.50-56.05 and 55.50-54.50. Buy above 57.50-55.00 with risk daily closing below 55.00 and targeting 58.10-59.20-60.50 and 61.00-61.80.

 
Intraday Support Levels
S1     57.50
S2     56.50
S3     56.07-55.50

Intraday Resistance Levels
R1     58.10-59.20
R2     60.50
R3     61.00-61.80

TECHNICAL INDICATORS
Name   Value Action
14DRSI   45.821 Sell
20-DMA   57.55 Buy
50-DMA   56.77 Buy
100-DMA   59.29 Sell
200-DMA   57.12 Buy
STOCH(5,3)   35.130 Sell
MACD(12,26,9)   -0.0194 Sell

EUR/USD

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EUR/USD on Wednesday made an intraday low of US$1.1059/EUR, high of US$1.1161/EUR and settled the day down by 0.704% to close at US$1.1075/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 1.1100-1.0905 with risk below 1.0905, targeting 1.1150-1.1210-1.1240 and 1.1280-1.1320. Sell below 1.1090-1.1210 targeting 1.1005-1.0950-1.0905 and 1.0850-1.0805 with stop-loss at daily closing above 1.1210.

 
Intraday Support Levels
S1     1.1000-1.0905
S2     1.0850
S3     1.0805

Intraday  Resistance Levels
R1     1.1090-1.1130
R2     1.1150
R3     1.1180-1.1210

TECHNICAL INDICATORS
Name   Value Action
14DRSI   42.376 Buy
20-DMA   1.1197 Sell
50-DMA   1.1245 Sell
100-DMA   1.1311 Sell
200-DMA   1.1394 Sell
STOCH(5,3)   23.958 Sell
MACD(12,26,9)   -0.0013 Buy

GBP/USD

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GBP/USD on Friday made an intra‐day low of US$1.21331/GBP, high of US$1.2248/GBP and settled the day up by 0.0913% to close at US$1.2158/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 1.2150-1.2410 with targets at 1.2100-1.2065 and 1.1980-1.1950-1.1900 top should be below 1.2410. Buy above 1.2100-1.1900 with targets 1.2140-1.2190-1.2250 and 1.2300-1.2350 with stop loss closing below 1.2200.

 
Intraday Support Levels
S1     1.2100-1.2065
S2     1.1980
S3     1.1950-1.1900

Intraday Resistance Levels
R1     1.2190-1.2250
R2     1.2300
R3     1.2350-1.2410

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

25.865

Buy
20-DMA   1.2417 Sell
50-DMA   1.2561 Sell
100-DMA   1.2789 Sell
200-DMA   1.2841 Sell
STOCH(5,3)   7.175 Sell
MACD(12,26,9)   -0.0011 Sell

USD/JPY

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USD/JPY on Wednesday made intra‐day low of JPY108.48/USD and made an intraday high of JPY108.99/USD and settled the day down by 0.168% at JPY108.75/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   60.936 Buy
20-DMA   108.33 Sell
50-DMA   108.30 Sell
100-DMA   109.63 Buy
200-DMA   110.56 Sell
STOCH(9,6)   71.58 Sell
MACD(12,26,9)   -0.008 Buy

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