Daily Markets

• Oil prices rose further on Friday, and were set to end the week higher as optimism over an eventual recovery in Chinese demand this year largely offset fears that a global economic slowdown will dent crude markets. Markets are betting on a strong boost to the Chinese economy from the week-long Lunar New Year holiday, particularly after the country relaxed almost all anti-COVID restrictions earlier this month. China kept its key lending rates at historic lows for a fifth consecutive month on Friday, indicating that the government plans to keep liquidity conditions loose in order to spur an economic recovery. Both the Organization of Petroleum Exporting Countries and the International Energy Agency forecast that a Chinese economic recovery will spur record-high crude demand in 2023 - a notion that has been the key driver of oil prices in recent weeks. Crude markets largely looked past data showing a bigger-than-expected build in U.S. inventories over the past week. But despite the large inventory build, an unexpected drop in distillates stockpiles indicated that freight and transport demand remained strong in the world’s largest economy. U.S. supplies are also set to tighten as the Biden administration stopped drawing crude from the Strategic Petroleum Reserve. The government has also flagged that it will begin refiling the reserve from February, which could act as a buy signal for markets. But on the other hand, concerns over slowing economic growth grew following a slew of weaker-than-expected U.S. data this week. Slowing industrial production in particular has brewed uncertainty over crude demand remaining steady later in 2023. Markets were also uncertain over the path of U.S. monetary policy, following comments from several Federal Reserve members this week. While most Fed members have called for a smaller pace of interest rate hikes in the coming months, they offered differing takes on when U.S. interest rates would peak.

Gold – XAU

Gold on Thursday made it’s intraday high of US$1935.10/oz and low of $1900.90/oz. Gold is up by 1.457% at US$1931.98/oz.

Technicals in Focus:

In daily charts, prices are above 200DMA (1809) and breakage below will call for 1790. MACD is above the zero line and histograms are a2lso increasing trend and it will bring an upward stance in the upcoming sessions. RSI is in the overbought region and more upside is expected before it gets stretched. The Stochastic Oscillator is in neutral territory and giving a negative crossover to a bearish stance for intraday trade.

Trading Strategy: Sell on Strength

Sell below 1930-1967 keeping stop loss closing above 1967, targeting 1914-1900-1894 and 1887-1879-1869. Buy in between 1914-1879 with risk below 1879, targeting 1931-1940-1948 and 1955-1967.

Silver - XAG

Silver on Thursday made its intraday high of US$23.92/oz and low of US23.15/oz settled up by 1.607% at US$23.83/oz.

Technicals in Focus:

On daily charts, silver is sustaining below 100DMA (21.00), breakage above will lead to 21.60. MACD is below the zero line and histograms are decreasing trend and it will bring a bearish stance in the upcoming sessions. RSI is approaching the neutral region, indicating a buy signal for now. The Stochastic Oscillator is in the oversold region and gives a positive crossover to show an upside move for the intraday trade.

Trading Strategy: Buy on Dips

Buy in between 23.60-20.30, targeting 24.40-25.00-25.90 and 26.20-26.90 with stop loss should be placed on the breakage below 20.30. Sell in between 24.40-26.20 with stop loss above 26.20; targeting 23.60-23.00-22.10 and 21.70-21.30-20.70.

Oil - WTI

Crude Oil on Thursday made an intra‐day high of US$81.47/bbl, an intraday low of US$79.21/bbl, and settled up by 1.812% to close at US$80.82/bbl.

Technicals in Focus:

On daily charts, oil is sustaining above its 20DMA i.e. 68.50 which is a support level and breakage below will call for 65.40. 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 neutral region, giving a positive crossover for confirmation of a bullish stance; while the RSI is in the neutral region and more upside can be expected to reach the overbought region, which is highly probable.

Trading Strategy: Neutral to Sell

Sell in between 81.20-83.40 with stop loss at 83.40; targeting 80.50-79.65-78.95 and 78.10-77.00-76.10. Buy above 80.50-76.10 with risk daily closing below 76.10; targeting 81.20-82.30-82.70 and 83.30-84.00.

EUR/USD

EUR/USD on Thursday made an intraday low of US$1.0781/EUR, a high of US$1.0839/EUR, and settled the day up by 0.35% to close at US$1.0830/EUR.

Technicals in Focus:

On daily charts, prices are sustaining above 50DMA (1.0736), which becomes immediate support, a break below will target 1.0647. MACD is above the zero line and histograms are increasing mode which will bring a bullish view. Stochastic is in overbought territory and giving positive 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 1.0830-1.1100, targeting 1.0830-1.0790-1.0690 and 1.0650-1.0590-1.0520 with stop-loss at daily closing above 1.1100. Buy above 1.0760-1.0520 with risk below 1.0820 targeting 1.0900-1.0945-1.0990 and 1.1050-1.1100.

GBP/USD

GBP/USD on Thursday made an intra‐day low of US$1.2312/GBP, a high of US$1.2396/GBP, and settled the day up 0.342% to close at US$1.2384/GBP.

Technicals in Focus:

On daily charts, prices are sustaining below 20DMA (1.2113) is becoming a resistance level. 14-D RSI is currently in a neutral region and direction is difficult to predict on RSI bases. The Stochastic Oscillator is in overbought territory and gives a positive crossover to confirm bullish a 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 1.2290-1.1890 with a target of 1.2290-1.2350 and 1.2390-1.2445-1.2290 with a stop loss closing below 1.1890. Sell in between 1.2350-1.2445 with targets at 1.2290-1.2170-1.2120 and 1.2040-1.1990-1.1890 with stop loss should be 1.2445.

USD/JPY

USD/JPY on Thursday made an intra‐day low of JPY127.75/USD and made an intraday high of JPY128.88/USD and settled the day down by 0.342% at JPY128.41/USD.

Technicals in Focus:

In daily charts, JPY is sustaining above 200DMA (108.30), which is initial 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 neutral territory and signaling to sell as it has given a negative crossover to confirm a bearish stance.

Trading Strategy: Neutral to Sell

Sell below 129.00-133.00 with risk above 133.00 targeting 127.45 and 126.90-126.20-125.00. Long positions above 127.50-126.20 with targets of 129.00-129.70-130.40 and 131.10-131.60-132.00 with stops below 130.00.