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Daily Market Lookup

  • The U.S. dollar was largely unchanged on Thursday in Asia. The U.S. Federal Reserve’s July 30-31 meeting minutes released overnight received some focus. The Minutes showed that officials saw the central bank’s rate cut last month as measures taken amid the trade war with China and low inflation. Fed Chairman Jerome Powell will give a speech on Friday. His comments are of particular interest after last week's inversion of the U.S. yield curve. Trump has said earlier that the central bank should cut rates by as much as 100 basis points and claimed the Fed was the only downside to the state of the economy. Meanwhile, the sterling traded slightly lower against the U.S. dollar after the French government said it believes a no-deal Brexit is the most likely scenario. Reuters reported that a top official in French President Manuel Macron’s office said no-deal is most likely after the fallout from U.K. PM Boris Johnson demanding the EU drop the Irish backstop. Johnson demanded on Tuesday that the backstop be removed from the divorce deal. The backstop agreement is an insurance policy to keep the Irish border open after Britain leaves the European Union. Asian currencies are expected to trade in tight ranges on Thursday ahead of U.S. Federal Reserve Chairman Jerome Powell's speech at Jackson Hole on Friday for signs of just how far the U.S. central bank is prepared to lower rates. His comments are of particular interest after an inversion in the Treasury yield curve highlighted the risk that the U.S. economy may fall into recession. While the Fed's minutes tempered some dovish expectations, markets still broadly expect further rate cuts as growth slows. At the Fed's last meeting in July, the U.S. central bank cut interest rates for the first time in a decade to 2.00-2.25%. The Fed next meets Sept. 17-18. Fed policymakers were deeply divided over whether to cut interest rates last month but were united in wanting to signal they were not on a preset path to more cuts. However, this message is not likely to sit well with U.S. President Donald Trump, who has repeatedly bashed Powell for not cutting interest rates more aggressively. Benchmark 10-year Treasury yields < US10YT=RR> gained after the minutes, but interest rate futures are pricing in a 100% probability of a rate cut at the Fed's September meeting, a 75% chance of an additional cut in October, and a 48% likelihood of another cut in December, the CME's FedWatch tool shows. The Fed and other central banks are cutting interest rates to contain a global economic slowdown caused by a prolonged trade war between the United States and China. Sterling traded a tad lower at 91.89 pence per euro (EURGBP=), on course for its second day of losses, as uncertainty about Britain's divorce from the European Union weighed on the pound. French President Emmanuel Macron said on Wednesday there would be no renegotiation of the terms for Britain's exit from the EU. British Prime Minister Boris Johnson is due to meet Macron in Paris on Thursday. German Chancellor Angela Merkel challenged Britain to come up with alternatives to the Irish border backstop within 30 days after meeting Johnson on Wednesday. Johnson, who won the premiership a month ago, is betting the threat of "no-deal" Brexit turmoil will convince Merkel and Macron that the EU should do a last-minute deal to remove the Irish backstop.
  • Federal Reserve policymakers were deeply divided over whether to cut interest rates last month but were united in wanting to signal they were not on a preset path to more cuts, a message not likely to sit well with U.S. President Donald Trump. Minutes from the two-day meeting released on Wednesday showed policymakers’ ultimate decision to lower the central bank’s benchmark interest rate by a quarter percentage point drew more opposition than was reflected in the rate-setting panel’s 8-2 vote, announced after the meeting adjourned on July 31. The depth of the debate raises the stakes for the signal that Chairman Jerome Powell is set to deliver on Friday at the Fed’s annual policy retreat in Jackson Hole, Wyoming. It also shows a Federal Reserve not eager to give Trump the larger rate reductions he is demanding. The divisions revealed in the minutes indicate there might have been more dissents if all participants had a vote. While Fed board governors are permanent voters, only five of the 12 regional reserve bank presidents have a vote at each meeting. At the same time, the minutes also showed broad concern among policymakers over a global economic slowdown, trade tensions and sluggish inflation. Since that meeting, the Fed has come under increasing pressure to cut borrowing costs more, including a call by Trump on Wednesday for the Fed to slash its benchmark rate. However, Fed policymakers agreed at their July 30-31 meeting that they did not want to give the impression they were planning more rate cuts. The comments on Wednesday by Trump, who has repeatedly criticized the Federal Reserve’s policies, come as he seeks to downplay worries that a trade war between the United States and China could weigh on the U.S. economy and trigger a possible recession before the November 2020 presidential election.
  • Oil prices slipped on Thursday in Asia even after the Energy Information Administration (EIA) reported larger-than-expected crude drawdown. The EIA reported earlier in the day that U.S. crude inventories decreased by 2.7 million barrels during the week ended Aug 16, more than the drop of 1.89 million forecast by analysts. It also reported that gasoline inventories rose by 300,000 barrels and that distillate stockpiles surged by 2.6 million barrels. Concerns about a slowing oil-demand growth were also cited as headwinds for oil prices, as trade tensions between U.S. and China linger. Hopes of a quick and smooth trade deal diminished after U.S. President Donald Trump said he had to “take China on” even if that causes short-term difficulties to the U.S. economy. Congressional researchers warned earlier that his tariffs would reduce U.S. economic output by 0.3% in 2020. Barani Krishnan, senior commodity analyst at Investing.com, said the U.S. Federal Reserve’s July meeting minutes that showed no plans for a series of rate cuts disappointed longs in the market and negatively affected investor sentiment.Fed Chairman Jerome Powell’s speech on Friday is expected to receive some focus, although Krishnan noted that the event is “likely to disappoint those hoping for a big rate cut.”

 

 
Intraday RESISTANCE LEVELS
22nd August 2019 R1 R2 R3
GOLD-XAU 1,509-1,516 1,526 1,539-1,550
Silver-XAG 17.50 17.90 18.50-18.90
Crude Oil 56.05-56.50 57.40 58.20-59.00
EURO/USD 1.1120-1.1150 1.1250 1.1250-1.1290
GBP/USD 1.2160 1.2190 1.2250-1.2300
USD/JPY 106.50 107.00-107.60 108.20

Intraday SUPPORTS LEVELS
22nd August 2019 S1 S2 S3
GOLD-XAU 1,489 1,481-1,474 1,466
Silver-XAG 17.00-16.80 16.50 15.90-15.50
Crude Oil 55.40 54.90 54.50-53.60
EURO/USD 1.1070-1.1030 1.0990 1.0900-1.0850
GBP/USD 1.2100-1.2065 1.2010 1.1980-1.1950
USD/JPY 106.10-105.60 105.00 104.60-104.00

Intra-Day Strategy (22nd 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 Wednesday made its intraday high of US$1507.97/oz and low of US$1496.43/oz. Gold down by 0.330% at US$1502.19/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     1,489
S2     1,481-1,474
S3     1,466
Intraday Resistance Levels
R1     1,509-1,516
R2     1,526
R3     1,539-1,550

Technical Indicators

Name   Value Action
14DRSI  

62.193

Buy
20-DMA   1474.20 Buy
50-DMA  

1430.98

Buy
100-DMA   1361.08 Buy
200-DMA   1320.14 Buy
STOCH(5,3)   32.519 Sell
MACD(12,26,9)   26.325 Buy

Silver - XAG

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Silver on Wednesday made its intraday high of US$17.18/oz and low of US$16.98/oz. Silver settled down by 0.011% 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 17.00-15.00 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   16.74 Sell
50-DMA   15.94 Buy
100-DMA   15.37 Buy
200-DMA   15.27 Buy
STOCH(5,3)   42.246 Sell
MACD(12,26,9)   0.346 Buy

Oil - WTI

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Crude Oil on Wednesday made an intra‐day high of US$57.05/bbl, intraday low of US$55.49/bbl and settled down by 0.348% to close at US$55.78/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 and 54.05-53.60-53.00. Buy above 55.40-52.60 with risk daily closing below 52.60 and targeting 56.50-57.00 and 57.40-58.20-59.00.

 
Intraday Support Levels
S1     55.40
S2     54.90
S3     54.50-53.60

Intraday Resistance Levels
R1     56.05-56.50
R2     57.40
R3     58.20-59.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   48.949 Sell
20-DMA   55.26 Buy
50-DMA   56.42 Buy
100-DMA   58.49 Sell
200-DMA   56.19 Buy
STOCH(5,3)   60.130 Buy
MACD(12,26,9)   -0.390 Sell

EUR/USD

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EUR/USD on Wednesday made an intraday low of US$1.1079/EUR, high of US$1.1106/EUR and settled the day down by 0.126% to close at US$1.1083/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 1.1070-1.0850 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     1.1070-1.1030
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   39.898 Buy
20-DMA   1.1140 Sell
50-DMA   1.1213 Sell
100-DMA   1.1215 Sell
200-DMA   1.1284 Sell
STOCH(5,3)   19.958 Sell
MACD(12,26,9)   -0.0013 Buy

GBP/USD

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GBP/USD on Wednesday made an intra‐day low of US$1.2110/GBP, high of US$1.2174/GBP and settled the day down by 0.355% to close at US$1.2120/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     1.2100-1.2065
S2     1.2010
S3     1.1980-1.1950

Intraday Resistance Levels
R1     1.2160
R2     1.2190
R3     1.2250-1.2300

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

39.307

Buy
20-DMA   1.2136 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 Wednesday made intra‐day low of JPY106.21/USD and made an intraday high of JPY106.63/USD and settled the day up by 0.366% at JPY106.60/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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