Daily Market Lookup

• Most Asian currencies weakened sharply on Monday as concerns over the inflationary impact of the Iran war drove up yields and pressured risk-driven markets in Asia. The Chinese yuan softened after economic data for April largely underwhelmed, leaving markets on edge over a continued slowdown in Asia’s largest economy. The dollar firmed in Asian trade, remaining upbeat as expectations of higher interest rates favored the greenback. The dollar index and dollar index futures added about 0.1% apiece. Get more insights on the dollar and the impact of the Iran war by subscribing to InvestingPro The yuan was pressured by data showing Chinese industrial production grew less than expected in April, while growth in retail sales slumped to an over three-year low. Fixed asset investment– a key gauge of private and government capital spending– shrank for the first time in three months in April. The readings indicated that China’s economy remained on the backfoot despite a small boost earlier this year, with sluggish domestic demand in particular being a key weight. Disruptions stemming from the Iran war are expected to weigh further on Asia’s largest economy. China over the weekend said it and the U.S. had agreed to lower some trade tariffs and barriers after last week’s summit. But details of the agreement remained unclear. Broader Asian currencies largely retreated on Monday, pressured by a stronger dollar amid rising oil prices and a surge in bond yields. This came as tensions between the U.S. and Iran remained high, with reports indicating that the U.S. and Israel were preparing more military operations against the country. Concerns over higher energy-fueled inflation saw markets bet on higher global interest rates, sparking a deep sell-off in bond markets that sent yields to multi-year highs. The Japanese yen’s USD/JPY pair rose 0.1%, with Japanese 10-year bond yields surging to a 29-year high. Rising inflation spurred bets that the Bank of Japan will hike interest rates in June, although this is expected to provide only limited relief to the beleaguered yen.
• Oil prices extended gains on Monday as efforts to end the Iran war appeared to have stalled, after a nuclear power plant in the United Arab Emirates came under attack and as U.S. President Donald Trump is expected to discuss military options on Iran. Both contracts gained more than 7% last week as hopes dimmed for a peace deal to end ship attacks and seizures around the key waterway of the Strait of Hormuz. Last week’s talks between Trump and Chinese President Xi Jinping ended without an indication from the world’s top oil importer that it would help resolve the conflict unleashed by the U.S.-Israeli attacks on Iran. Drone attacks on the UAE and Saudi Arabia and rhetoric from the United States and Iran raised concerns of an escalation in the conflict Saudi Arabia, which intercepted three drones that entered from Iraqi airspace, warned it would take the necessary operational measures to respond to any attempt to violate its sovereignty and security. Trump is expected to meet top national security advisers on Tuesday to discuss options for military action regarding Iran, Axios reported. In a move that could support oil prices, the Trump administration on Saturday allowed the lapse of a sanctions waiver that had previously allowed countries including India to buy Russian seaborne oil after a month-long extension. "Fears of renewed strikes on Iran have worsened supply fears ... the United States letting the Russia sanctions waiver lapse didn’t help," said Vandana Hari, founder of oil market analysis provider Vanda Insights.

Gold – XAU

Gold on Friday interaday high of US$4665.23/oz and low of $4511.74/oz. God is down by 2.43% at US$4540.37/oz.

Technicals in Focus:

On the daily charts, gold trades higher than 20DMA (2197). If it drops below this level, it could lead to 2,100. The MACD is currently above the zero line and the histograms are showing an increasing trend, indicating that there may be upward movement in the coming sessions. The RSI is currently at 83.04, which is in the overbought region, suggesting there may be selling pressure in the next 2 to 3 sessions. The Stochastic Oscillator is also in the overbought territory but has given a positive crossover, indicating a bullish stance for intraday trades, but rebound in expected in all the overbought indicators.

Trading Strategy: Sell on Strength

Sell below 4555-5020 keeping stop loss closing above 5020, targeting 4530-4500-4482-4460 and 4420-4400-4380-4364. Buy in between 4530-4320 with risk below 4320 targeting 4560-4590-4610-4655 and 4680-4710-4750-4774.

Silver - XAG

Silver on Friday its intraday high of US8.84/oz and low of US$75.72/oz settle down by 4.68% at US$75.97/oz.

Technicals in Focus:

On daily charts, silver is sustaining above 20MA (25.05), breakage above will lead to 23.73. MACD is below the zero line and histograms are increasing trend, bringing a bullish stance in the upcoming sessions. RSI is in the oversold region, indicating a sell signal for now. The Stochastic Oscillator is in the overbought region and gives a positive crossover to show an upside move for the intraday trade.

Trading Strategy: Buy on Dips

Buy in between, 74.50-72.00 targeting 76.00-76.75-77.20-78.00 and 79.10-79.90-80.40-81.00 with stop loss should be placed on the breakage below 82.00. Sell in between 76.00-82.15 with a stop loss above 83.00 targeting 74.50-73.85-73.00 and 72.6-72.00

Oil - WTI

Crude Oil on Friday high of US$101.31/bbl, an intraday low of US$95.87/bbl, and settled up by 3.49% to close at US$100.86/bbl.

Technicals in Focus:

On daily charts, oil is sustaining above its 100DMA i.e. 75.37, a support level, and breakage above will call for 77.48. MACD is above the zero line and histograms are in increasing mode will bring a bullish stance in the upcoming sessions. The Stochastic Oscillator is in the overbought region, giving a negative crossover to confirm a bearish stance; while the RSI is in the neutral region, more upsides can be expected to reach the overbought region, which is highly probable.

Trading Strategy: Neutral to Sell

Sell in between 98.70-102.47 with stop loss at 102.50.00, targeting 98.00-97.30-96.60-96.60 and 96.00-95.20-94.50-93.86-93.00. Buy above 98.00-91.00 with risk daily closing below 91.00, targeting 98.70-99.30 and 100.00-101.00-101.90-102.47.

EUR/USD

EUR/USD on Friday made an intraday low of US$1.1616/EUR, a high of US$1.1672/EUR, and settled down by 0.360% to close at US$1.1624/EUR.

Technicals in Focus:

On daily charts, prices are sustaining above 100DMA (1.1661), which becomes immediate support, a break below will target 1.1695. MACD is above the zero line and histograms are increasing mode, bringing a bullish view. Stochastic is in oversold territory, giving negative crossovers to the bullish outlook for intraday. 14D RSI is currently in a neutral region and giving no directions to consider right now.

Trading Strategy: Neutral to Sell

Sell below 1.1640-1.1990, targeting 1.1600 and 1.1565-1.1500-1.1450-1.1410 with stop-loss at daily closing above 1.1990. Buy above 1.1610-1.1450 with risk below 1.1450 targeting 1.1690-1.750-1.1790 and 1.1810-1.1840-1.1920-1.1960.

GBP/USD

GBP/USD on Friday made a intraday low of US$1.3314/GBP, a high of US$1.3403/GBP, and settled the day down by 0.547% to close at US$1.3325/GBP.

Technicals in Focus:

On daily charts, prices are sustaining above 50DMA (1.2674) is becoming a support level. 14-D RSI is currently in a neutral region and direction is difficult to predict on an RSI basis. The Stochastic Oscillator is in oversold territory and gives a positive crossover to confirm a bullish stance. MACD is above the zero line, but histograms are increasing leading to movement.

Trading Strategy: Neutral to Buy

Based on the charts and explanations above; buy between 1.3490-1.3150 with a target of 1.3570 and 1.3600-1.3640-1.3690-1.3725 with a stop loss closing below 1.3150. Sell in between 1.3570-1.3820 with targets at 1.3490-1.3440-1.3395-1.3325-1.3275 and 1.3250-1.3190-1.3150 with a stop loss of 1.3900.

USD/JPY

USD/JPY on Friday made an intra‐day low of JPY158.18/USD an intraday high of 158.83/USD, and settled the day up by 0.279% at JPY158.77/USD.

Technicals in Focus:

In daily charts, JPY is sustaining above 100DMA (152.35), major support on the daily chart. 14-D RSI is currently in the overbought region and chances of downward are expected based on RSI. MACD is above the zero line but histograms are decreasing mode which might lead to downward movement. The Stochastic Oscillator is in overbought territory and signaling to sell as it has given a negative crossover to confirm a bearish stance.

Trading Strategy: Neutral to Sell

Sell below 158.80-163.10 with risk above 163.10 targeting 159.40-158.70-158.10-157.00 and 156.60-153.00-152.65-152.10. Long positions above 158.00-152.00 with targets of 158.70-159.40-160.00 and 160.90-161.60-162.20-162.60 with stops below 148.00.