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  • Asian shares found some footing on Friday after a turbulent week as China hinted at more support for its economy, amid growing expectations of aggressive stimulus from all the major central banks. Sentiment got a lift when China’s state planner said Beijing would roll out a plan to boost disposable income, though details were lacking. U.S. President Donald Trump said on Thursday he believed China wanted to make a deal and that the dispute would be fairly short, despite it already lasting more than a year.With no settlement in sight, investors have hedged against a global slowdown by buying bonds. Yields on 30-year debt hit an all-time low of 1.916% to be down 27 basis points for the week, the sharpest such decline since mid-2012. That meant investors were willing to lend the government money for three decades for less than the overnight rate. Such is the gloom that surprisingly strong U.S. retail sales came and went with no impact on the bond rally. Analysts have cautioned that the current bond market is a different beast than in the past and might not be sending a true signal on recession. Indeed, futures imply a one-in-three chance the Federal Reserve will chop rates by 50 basis points at its September meeting, and see them reaching just 1% by the end of next year. European Central Banker Olli Rehn on Thursday flagged the need for a significant easing package in September.
  • The U.S. dollar steadied on Friday in Asia, while the Japanese yen fell following the release of better-than-expected U.S. retail sales data. U.S. retail sales rose 0.7% in July from a month earlier, data showed. Markets previously expected a rise of 0.3%. Despite the positive data, analysts warned the fragile calm in markets might not last too long. An inversion of the U.S. Treasury yield curve sparked concerns of a potential recession, while uncertainties surrounding the Sino-U.S. trade war also weigh as Beijing vowed retaliation against additional U.S. tariffs on Chinese goods. Ongoing protests in Hong Kong are also expected to further complicate the U.S.-China relationship. On Thursday, U.S. President Donald Trump said he trusts Chinese leader Xi Jinping would want to solve the Hong Kong problem “quickly and humanely.” China responded by saying it does not want outside opinions on internal matters. The safe-haven yen fell against the dollar as investor sentiment recovered somewhat amid hopes that central banks, particularly the Federal Reserve, would step in to ease monetary policy Fed Chairman Jerome Powell may give a hint of his thinking when he speaks on Aug. 23 at the annual central bankers retreat in Jackson Hole, Wyoming. The topic of his remarks is Challenges for Monetary Policy, according to the Fed’s public schedule updated on Thursday.
  • The dollar held onto gains on Friday after a surge in U.S. retail sales eased concerns about the world's top economy, but traders cautioned against reading too much into one piece of data given the growing risks to the outlook. The greenback was on course for a weekly gain against safe-haven currencies such as the Japanese yen and the Swiss franc, pointing to some respite for frayed nerves after fears of recession and protests in Hong Kong rattled financial markets. Data showing American consumers continued to splurge in July came as a relief to investors after the U.S. bond market sounded alarms of a recession. Yet, the fragile calm in markets is unlikely to last, traders said. This week's inversion in the U.S. Treasury yield curve, which has historically preceded several past U.S. recessions, has stoked fresh worries about the economic impact of the Sino-U.S. trade war. China on Thursday vowed to counter the latest U.S. tariffs on $300 billion of Chinese goods, but U.S. President Donald Trump said any pact would have to be on America's terms, suggesting a resolution to the trade war remains elusive. Trump, who is seeking re-election in 2020 and had made the economy and his tough stance on China a key part of his 2016 campaign for the White House, said any agreement must meet U.S. demands. More protests are also expected in Hong Kong over the weekend, which could become a new geopolitical flashpoint and further complicate the U.S.-China trade war. A day after inverting, the U.S. yield curve steepened a little. Curve inversion, which occurs when long-term yields dip below short-term yields. Despite the steepening, yields continued to fall, with 30-year yields hitting record lows and 10-year yields sinking to a three-year trough Sterling was marginally higher, on course for its first weekly gain since mid-July, as positive data on retail sales and consumer pries showed the British economy is in better shape than some investors had feared. However, sterling bears are still on the ascendancy given the risk that Prime Minister Boris Johnson will take Britain out of the European Union without transitional trade agreements, potentially causing short-term economic turmoil.
  • Oil prices gained on Friday in Asia as recession fears eased somewhat following the release of better-than-expected U.S. retail sales figures. A rise in U.S. retail sales was cited as easing some concerns of a potential recession. An inversion of the U.S. bond yield, ongoing Sino-U.S. trade war and weak Chinese data sent global stocks and most risk assets down earlier this week. Despite the gains today, traders remained cautious as trade war between China and the U.S. showed signs of a potential escalation. In a short statement released on Thursday, China said it has to take necessary counter-measures to the latest U.S. tariffs on $300 billion of Chinese goods. Beijing said the U.S. tariffs violate a consensus reached by leaders of the two countries in an effort to resolve their disputes via negotiation. The U.S. said early this month it would slap duties on $300 billion of Chinese goods starting Sept. 1, which would effectively cover all of China’s exports to the U.S. But President Donald Trump backed off on part of the plan on Tuesday, delaying duties on some of the items on the list such as cellphones, laptops and other consumer goods in the hope of blunting their impact on U.S. holiday sales. Tariffs will still apply to those products starting in mid-December.

 

 
Intraday RESISTANCE LEVELS
16th August 2019 R1 R2 R3
GOLD-XAU 1,526 1,530-1,539 1,550
Silver-XAG 17.50 17.90 18.50-18.90
Crude Oil 55.50-56.05 56.50 57.40-58.20
EURO/USD 1.1150-1.1200 1.1250 1.1290-1.1325
GBP/USD 1.2120-1.2150 1.2190 1.2250-1.2300
USD/JPY 106.50 107.00-107.60 108.20

Intraday SUPPORTS LEVELS
16th August 2019 S1 S2 S3
GOLD-XAU 1,509-1,500 1,489 1,481-1,474
Silver-XAG 17.10-16.80 16.50 15.90-15.50
Crude Oil 54.90 54.50-53.60 53.00
EURO/USD 1.1100 1.1090-1.1030 1.0990
GBP/USD 1.2065-1.2010 1.1980 1.1950-1.1900
USD/JPY 106.10-105.60 105.00 104.60-104.00

Intra-Day Strategy (16th 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$1526.91/oz and low of US$1507.79/oz. Gold up by 0.441% at US$1522.81/oz.

Technicals in Focus:

In daily charts, prices are above 50DMA (1410) and breakage below will call for 1400. 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 overbought 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 1509-1469 with risk below 1469, targeting 1526-1532 and 1539-1550. Sell below 1526-1550 keeping stop loss closing above 1550, targeting 1509-1500-1489 and 1481- 1474.

 
Intraday Support Levels
S1     1,509-1,500
S2     1,489
S3     1,481-1,474
Intraday Resistance Levels
R1     1,526
R2     1,530-1,539
R3     1,550

Technical Indicators

Name   Value Action
14DRSI  

70.425

Buy
20-DMA   1462.19 Buy
50-DMA  

1420.73

Buy
100-DMA   1354.70 Buy
200-DMA   1316.98 Buy
STOCH(5,3)   70.519 Sell
MACD(12,26,9)   30.325 Buy

Silver - XAG

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Silver on Thursday made its intraday high of US$17.37/oz and low of US$17.08/oz. Silver settled up by 0.34% at US$17.24/oz.

Technicals in Focus:

On daily charts, silver is sustaining above 50DMA (15.70), breakage below will lead to 15.20. MACD is above zero line and histograms are increasing trend and it will bring bullish stance in the upcoming sessions. RSI is in overbought region, indicating buy signal for now. The Stochastic Oscillator is in overbought 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 17.20-15.00 targeting 17.50-17.90 and 18.50-18.90; stop breakage below 15.00. Sell below 17.50-18.90 with stop loss above 18.90; targeting 17.20-16.90-16.60 and 16.20-15.90.

 
Intraday  Support Levels
S1     17.10-16.80
S2     16.50
S3     15.90-15.50

Intraday  Resistance Levels
R1     17.50
R2     17.90
R3     18.50-18.90

TECHNICAL INDICATORS
Name   Value Action
14DRSI   70.706 Buy
20-DMA   16.60 Sell
50-DMA   15.76 Buy
100-DMA   15.29 Buy
200-DMA   15.20 Buy
STOCH(5,3)   62.246 Sell
MACD(12,26,9)   0.396 Buy

Oil - WTI

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Crude Oil on Thursday made an intra‐day high of US$55.27/bbl, intraday low of US$53.73/bbl and settled down by 0.448% to close at US$54.56/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 55.50-59.00 with stop loss at 59.00; targeting 54.90-54.05-53.60 and 53.00-52.50. Buy above 54.90-52.60 with risk daily closing below 52.60 and targeting 55.50-56.10-57.00 and 57.40-58.20-59.00.

 
Intraday Support Levels
S1     54.90
S2     54.50-53.60
S3     53.00

Intraday Resistance Levels
R1     55.50-56.05
R2     56.50
R3     57.40-58.20

TECHNICAL INDICATORS
Name   Value Action
14DRSI   47.781 Sell
20-DMA   55.43 Buy
50-DMA   56.16 Buy
100-DMA   58.78 Sell
200-DMA   56.32 Buy
STOCH(5,3)   48.130 Sell
MACD(12,26,9)   -0.637 Sell

EUR/USD

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EUR/USD on Thursday made an intraday low of US$1.1090/EUR, high of US$1.1157/EUR and settled the day down by 0.285% to close at US$1.1105/EUR.

Technicals in Focus:

On daily charts, prices are sustaining below 100DMA (1.1293), which become immediate resistance level, break above will target 1.1320-1.1350. MACD is below zero line but histograms are increasing mode which will bring bullish view. Stochastic is in overbought 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.

Trading Strategy: Neutral to Buy

Buy above 1.1100-1.0980 with risk below 1.0980, targeting 1.1160-1.1200-1.1250 and 1.1290-1.1350. Sell below 1.1160-1.1350 targeting 1.1130-1.1090 and 1.1005-1.0980 with stop-loss at daily closing above 1.1350.

 
Intraday Support Levels
S1     1.1100
S2     1.1090-1.1030
S3     1.0990

Intraday  Resistance Levels
R1     1.1150-1.1200
R2     1.1250
R3     1.1290-1.1325

TECHNICAL INDICATORS
Name   Value Action
14DRSI   38.889 Buy
20-DMA   1.1152 Sell
50-DMA   1.1226 Sell
100-DMA   1.1219 Sell
200-DMA   1.1288 Sell
STOCH(5,3)   8.958 Sell
MACD(12,26,9)   -0.0013 Buy

GBP/USD

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GBP/USD on Thursday made an intra‐day low of US$1.2049/GBP, high of US$1.2149/GBP and settled the day up by 0.265% to close at US$1.2086/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 1.2120-1.2300 with targets at 1.2065-1.2010-1.1980 and 1.1950-1.1900 stop-loss should be below 1.2250. Buy above 1.2065-1.1900 with targets 1.2120-1.2150 and 1.2190-1.2250-1.2300 with stop loss closing below 1.2300.

 
Intraday Support Levels
S1     1.2065-1.2010
S2     1.1980
S3     1.1950-1.1900

Intraday Resistance Levels
R1     1.2120-1.2150
R2     1.2190
R3     1.2250-1.2300

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

36.290

Buy
20-DMA   1.2200 Sell
50-DMA   1.2437 Sell
100-DMA   1.2617 Sell
200-DMA   1.2796 Sell
STOCH(5,3)   47.175 Sell
MACD(12,26,9)   -0.0011 Sell

USD/JPY

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USD/JPY on Thursday made intra‐day low of JPY105.69/USD and made an intraday high of JPY106.77/USD and settled the day up by 0.201% at JPY106.11/USD.

Technicals in Focus:

In daily charts, JPY is sustaining above 50DMA (107.84), 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 106.50-108.00 with risk above 108.00 targeting 106.10-105.80-105.00 and 104.50-104.00. Long positions above 105.80-104.00 with targets of 106.50-107.00 and 107.60-108.00-109.05 with stop below 106.00.

 
Intraday Support Levels
S1     106.10-105.60
S2     105.00
S3     104.60-104.00

INTRADAY RESISTANCE LEVELS
R1     106.50
R2     107.00-107.60
R3     108.20

TECHNICAL INDICATORS
Name   Value Action
14DRSI   41.684 Buy
20-DMA   107.10 Sell
50-DMA   107.67 Sell
100-DMA   109.11 Buy
200-DMA   110.11 Sell
STOCH(9,6)   52.253 Buy
MACD(12,26,9)   -0.553 Buy

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