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Daily Market Lookup

  • Asian stocks rode a Wall Street rally on Monday and were also cheered by a decision from China’s central bank to alter the way it sets a key interest rate benchmark, a move seen by analysts as reducing borrowing costs for companies. The People’s Bank of China (PBOC) on Saturday unveiled key interest rate reforms to help steer borrowing costs lower for companies and support a slowing economy caught in the grip of a bruising trade war with the United States. That move helped Chinese stocks lead regional gains on Monday amid a broadly more upbeat investor mood. Hopes major economies will seek to prop up slowing growth with fresh stimulus have helped ease some of the recession fears unleashed in markets last week Over recent weeks, recession worries - triggered by an inversion in the U.S. bond yield curve - have led to a shakeout in financial markets. That has driven speculation of more support from policy makers, including from the U.S. Federal Reserve which last month cut rates for the first time since the financial crisis. Elsewhere in currencies, the dollar index .DXY against a basket of six major currencies hovered near a two-week high of 98.339 climbed on Friday. The index was supported as U.S. Treasury yields bounced back from recent lows in the wake of German stimulus hopes. Falling yields last week caused the two-year/10-year Treasury curve to invert for the first since 2007, a phenomenon widely regarded as a recession signal that puts the Federal Reserve interest rate deliberations into focus. Powell will deliver a speech on Friday at an annual meeting of central bankers in Jackson Hole, Wyoming. Powell said after the Fed lowered rates in July that the easing was not the start of a series of cuts. But market expectations for the Fed to cut rates by another 25 basis points at the next policy meeting in September has topped 80%.
  • The U.S. dollar was hovering near two-week highs against a currency basket on Monday as U.S. Treasury yields bounced back from recent lows amid hopes that major economies will seek to prop up slowing growth with fresh stimulus. Falling yields last week caused the two-year/10-year Treasury curve to invert for the first since 2007, a phenomenon widely regarded as a recession signal that puts the Federal Reserve interest rate deliberations into focus. Powell will deliver a speech on Friday at an annual meeting of central bankers in Jackson Hole, Wyoming. Powell said after the Fed lowered rates in July that the easing was not the start of a series of cuts. But market expectations for the Fed to cut rates by another 25 basis points at the next policy meeting in September have increased. The Chinese yuan was slightly lower after U.S. President Donald Trump said he was not ready yet to make a trade with China. Traders were also cautious ahead of the debut of China's new benchmark lending rate on Tuesday, which was announced at the weekend. The People’s Bank of China on Saturday unveiled interest rate reforms to help lower borrowing costs for companies and support slowing growth, which has been hit by the trade war with the U.S. The US Dollar may extend gains vs the Euro if Eurozone inflation data misses estimates and boosts ECB rate cut bets and the prospect of the central bank reintroducing quantitative easing. Economic data out of the Eurozone has been tending to underperform relative to economists’ expectations. Last week, preliminary German GDP data showed that Europe’s largest economy likely contracted in the second quarter. A week before that, German ZEW Survey Expectations came in at -44.1. The last time the data hovered at those levels in the past ten years was during the 2008 financial meltdown and the Eurozone debt crisis. If the “steam engine of Europe” continues to slow down, weaker demand will begin to ripple out into other member states and undermine regional price growth.
  • Gold prices fell on Monday in Asia as Asian equities traded higher. The fall in gold prices came as Asian stock markets recovered today. Hong Kong’s Hang Seng Index jumped 2%, while Chinese stocks also gained more than 1.7%. Wednesday’s release of the Fed meeting minutes for July, along with the Thursday-through-Saturday Jackson Hole retreat, and Chairman Jay Powell’s speech on Friday are expected to dictate gold price movement this week. Traders will also keep an eye out on developments on the Sino-U.S. trade front, as U.S. President Donald Trump reiterated on the weekend that he is not ready to make a trade deal with China, hinting that he wants China to solve the problems in Hong Kong in a humanely way first. Despite the losses today, analysts said safe-haven demand for gold remained strong. Since the start of August, gold has gained over 6%, or about $90, on heightened trade tensions and sustained buying by central banks responding to a slew of disappointing economic data globally.
  • Oil prices gained on Monday in Asia following a volatile week as traders digested the latest development on the Sino-U.S. trade front. Oil markets swung between gains and losses last week as a delay on tariffs on some Chinese goods sent crude prices higher but concerns of a recession and a surge in crude stockpiles put pressure on the markets. U.S. President Donald Trump reiterated on the weekend that he is not ready to make a trade deal with China, hinting that he wants to see Beijing deal with the ongoing protests in Hong Kong first. The president added that he will make a decision on whether to extend a license that would allow Chinese tech giant Huawei to continue doing business with U.S. companies later today. The news came following some conflicting trade war signals last week. China’s finance ministry said on Thursday it has to take necessary counter-measures to the latest U.S. tariffs on $300 billion of Chinese imports, but the Xi Jinping administration was saying it hoped to meet Washington halfway on the trade dispute.

 

 
Intraday RESISTANCE LEVELS
19th August 2019 R1 R2 R3
GOLD-XAU 1,516-1,526 1,539 1,550
Silver-XAG 17.50 17.90 18.50-18.90
Crude Oil 56.05 56.50 57.40-58.20
EURO/USD 1.1120-1.1150 1.1250 1.1250-1.1290
GBP/USD 1.2150 1.2190 1.2250-1.2300
USD/JPY 106.50 107.00-107.60 108.20

Intraday SUPPORTS LEVELS
19th August 2019 S1 S2 S3
GOLD-XAU 1,500 1,489 1,481-1,474
Silver-XAG 17.00-16.80 16.50 15.90-15.50
Crude Oil 55.50-54.90 54.50 53.60-53.00
EURO/USD 1.1090-1.1030 1.0990 1.0900-1.0850
GBP/USD 1.2120-1.2065 1.2010 1.1980-1.1950
USD/JPY 106.10-105.60 105.00 104.60-104.00

Intra-Day Strategy (19th 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 Friday made its intraday high of US$1527.90/oz and low of US$1503.63/oz. Gold down by 0.626% at US$1513.38/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 1500-1469 with risk below 1469, targeting 1516-1526-1532 and 1539-1550. Sell below 1516-1550 keeping stop loss closing above 1550, targeting 1500-1489 and 1481- 1474.

 
Intraday Support Levels
S1     1,500
S2     1,489
S3     1,481-1,474
Intraday Resistance Levels
R1     1,516-1,526
R2     1,539
R3     1,550

Technical Indicators

Name   Value Action
14DRSI  

766.540

Buy
20-DMA   1466.94 Buy
50-DMA  

1423.86

Buy
100-DMA   1357.70 Buy
200-DMA   1317.98 Buy
STOCH(5,3)   64.519 Sell
MACD(12,26,9)   29.325 Buy

Silver - XAG

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Silver on Friday made its intraday high of US$17.31/oz and low of US$17.04/oz. Silver settled down by 0.685% at US$17.10/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     17.00-16.80
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   64.093 Buy
20-DMA   16.69 Sell
50-DMA   15.85 Buy
100-DMA   15.33 Buy
200-DMA   15.24 Buy
STOCH(5,3)   62.246 Sell
MACD(12,26,9)   0.396 Buy

Oil - WTI

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Crude Oil on Friday made an intra‐day high of US$55.57/bbl, intraday low of US$54.18/bbl and settled up by 0.432% to close at US$54.78/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 56.00-59.00 with stop loss at 59.00; targeting 55.50-54.90-54.05 and 53.60-53.00-52.50. Buy above 55.50-52.60 with risk daily closing below 52.60 and targeting 56.10-57.00 and 57.40-58.20-59.00.

 
Intraday Support Levels
S1     55.50-54.90
S2     54.50
S3     53.60-53.00

Intraday Resistance Levels
R1     56.05
R2     56.50
R3     57.40-58.20

TECHNICAL INDICATORS
Name   Value Action
14DRSI   49.781 Sell
20-DMA   55.32 Buy
50-DMA   56.20 Buy
100-DMA   58.68 Sell
200-DMA   56.25 Buy
STOCH(5,3)   43.130 Sell
MACD(12,26,9)   -0.548 Sell

EUR/USD

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EUR/USD on Friday made an intraday low of US$1.1065/EUR, high of US$1.1111/EUR and settled the day down by 0.144% to close at US$1.1089/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     1.1090-1.1030
S2     1.0990
S3     1.0900-1.0850

Intraday  Resistance Levels
R1     1.1120-1.1150
R2     1.1250
R3     1.1250-1.1290

TECHNICAL INDICATORS
Name   Value Action
14DRSI   40.9612 Buy
20-DMA   1.1146 Sell
50-DMA   1.1225 Sell
100-DMA   1.1218 Sell
200-DMA   1.1286 Sell
STOCH(5,3)   16.958 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$1.2073/GBP, high of US$1.2174/GBP and settled the day up by 0.483% to close at US$1.2145/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     1.2120-1.2065
S2     1.2010
S3     1.1980-1.1950

Intraday Resistance Levels
R1     1.2150
R2     1.2190
R3     1.2250-1.2300

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

39.307

Buy
20-DMA   1.2185 Sell
50-DMA   1.2426 Sell
100-DMA   1.2662 Sell
200-DMA   1.2792 Sell
STOCH(5,3)   68.175 Buy
MACD(12,26,9)   -0.0011 Sell

USD/JPY

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USD/JPY on Friday made intra‐day low of JPY106.02/USD and made an intraday high of JPY106.48/USD and settled the day up by 0.201% at JPY106.35/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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