Daily Markets

• Most Asian currencies weakened on Monday with the Chinese yuan lagging its peers following persistent signs of deflation in the country, while the dollar steadied amid persistent uncertainty over U.S. trade tariffs and slowing growth. The Japanese yen was an outlier, remaining close to its strongest level in five months amid persistent safe haven demand. Mildly softer-than-expected wage data also did little to deter bets on more interest rate hikes from the Bank of Japan. But barring the yen, most Asian currencies were nursing steep losses in recent weeks as risk appetite was decimated by uncertainty over the U.S. economy and policies. The dollar index and dollar index futures steadied in Asian trade after also clocking steep losses in recent weeks, as concerns over a U.S. economic slowdown also weighed. President Donald Trump on Sunday declined to rule out the possibility of a U.S. recession when speaking to Fox News. The Chinese yuan was among the worst performers in Asia on Monday, with the USD/CNY pair rising 0.3%. Chinese consumer and producer inflation data both shrank in February and read weaker than expected, indicating that disinflation in the country still remained in play. The reading came despite a string of measures from Beijing to shore up weak consumer spending, including subsidies on several discretionary goods. The inflation data also underscored the need for more stimulus measures from Beijing to support growth. Government officials had last week vowed more fiscal measures this year to support the economy, although they provided few details on the planned measures. China is also set for more economic headwinds from a growing trade war with the U.S., after U.S. President Donald Trump last week imposed 20% trade tariffs against the country. The Japanese yen was an outlier among its peers, with the USD/JPY pair falling 0.3% and remaining close to its lowest point since early-October. The yen strengthened chiefly on safe haven demand amid increased economic uncertainty. The currency also benefited from persistent bets on more interest rate hikes by the Bank of Japan, even as wage data for January read slightly weaker than expected on Monday. But the reading still showed persistent growth in Japanese wages- a scenario that gives the BOJ more headroom to raise interest rates. While the central bank is widely expected to keep rates steady next week, traders are betting that a hike could come as soon as May, amid rising inflation and expectations of bumper wage hikes from springtime wage negotiations in the country.

Gold – XAU

Gold on Friday its intraday high of US$2930.16/oz and low of $2895.95/oz. Gold is up by 0.0474% at US$2909.28/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 2,920-2,970 keeping stop loss closing above 2970, targeting 2860-2849-2830 and 2820-2800-2788. Buy in between 2890-2789 with risk below 2789 targeting 2920-2930-2943 and 2952-2960-2970.

Silver - XAG

Silver on Friday its intraday high of US$32.68/oz and low of US$32.08/oz settle down by 0.199% at US$32.54/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 32.00-27.50, targeting 32.60 and 33.10-33.80-34.20 with stop loss should be placed on the breakage below 27.00. Sell in between 32.60-34.30 with a stop loss above 35.00 targeting 32.10-31.60-30.90 and 29.90-29.10-28.60.

Oil - WTI

Crude Oil on intra‐day Friday high of US$67.91/bbl, an intraday low of US$65.87/bbl, and settled up by 1.291% to close at US$68.82/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 upside can be expected to reach the overbought region, which is highly probable.

Trading Strategy: Neutral to Sell

Sell in between 66.90-77.85 with stop loss at 84.00; targeting 69.00-68.55-67.90 and 66.80-66.00. Buy above 66.00-64.05 with risk daily closing below 64.00, targeting 70.20-70.60-71.10 and 72.20-72.90-74.05.

EUR/USD

EUR/USD on friday made an intraday low of US$1.0777/EUR, a high of US$1.0880/EUR, and settled the day down by 0.0417% to close at US$1.0831/EUR.

Technicals in Focus:

On daily charts, prices are sustaining above 100DMA (1.0800), which becomes immediate support, a break below will target 1.0717. 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 1.0840-1.1035, targeting 1.0800-1.0725-1.0650 and 1.0600-1.0540-1.0490 with stop-loss at daily closing above 1.1035. Buy above 1.0800-1.0490 with risk below 1.0490 targeting 1.0850-1.0890-1.0935 and 1.0990-1.1035.

GBP/USD

GBP/USD on Friday low of US$1.2869/GBP, a high of US$1.2944/GBP, and settled the day up 0.378% to close at US$1.2922/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 in between 1.2850-1.2380 with a target of 1.2920-1.2960-1.2990 and 1.3040-1.0390-1.3140 with a stop loss closing below 1.2380. Sell in between 1.2920-1.3140 with targets at 1.2850-1.2790-1.2753 and 1.2660-1.2590-1.2510 with a stop loss of 1.3140.

USD/JPY

USD/JPY on Friday an intra‐day low of JPY146.93/USD an intraday high of 148.19/USD, and settled the day up by 0.0452% at JPY148.03/USD.

Technicals in Focus:

In daily charts, JPY is sustaining above 100DMA (155.35), 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 in 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 147.90-159.50 with risk above 160.00 targeting 147.10-146.50-146.00 and 145.20-144.50-143.90. Long positions above 147.10-143.50 with targets of 148.00-148.60-149.00 and 150.00-150.60-151.10 with stops below 143.00.